ONE of the Island’s biggest fulfilment companies has been sold with the loss of 17 jobs.
And the new owners of Blahdvd.com have announced that they are relocating the popular DVD and CD retailer to Switzerland.
It is claimed that a States policy designed to stop the Island being used as a ‘postbox’ by major high street retailers to avoid charging VAT on online sales prevented a deal being done that would have allowed the business to stay in Jersey. The policy was put in place two years ago by Economic Development Minister Philip Ozouf (pictured).
The minister effectively banned businesses such as Tesco and Amazon from using a mailing service provided by Jersey Post to distribute online VAT-free sales of products like CDs and DVDs. The UK Treasury was threatening to take action against the Island for allowing its tax-free status to be exploited. However, that has not stopped Guernsey continuing to do so.
It was reported this week that Woolworths and HMV had installed kiosks in some of their UK stores allowing shoppers to order goods under £18 directly from Guernsey and not pay VAT on the purchases.
HMV told the Guardian newspaper that VAT-free sales for the last financial year were worth about £50 million. The loss to the UK Treasury was about £8.75 million.
Blah group director and former States Deputy Lyndon Farnham said that the Jersey policy which prevented companies not owned by Island-based shareholders from running fulfilment operations was the main reason they had decided to sell.
‘In May, dvd.co.uk wrote to ask if we would be interested in some sort of merger or partnership. This would have been our preferred option, but the policy restricted this, so we decided to sell the entire business,’ he said.
Headquarters
The deal was completed on Friday, and Blah has closed its warehouse headquarters on Avenue de la Commune in St Brelade. Much of the stock was shipped to Switzerland over the weekend.
A total of 17 staff were effectively made redundant due to the sale, with two others being retained by dvd.co.uk.
Some staff have found new jobs and Mr Farnham said that he hoped that others would be re-employed quickly.
Although Mr Farnham was not prepared to indicate the sale value, he said that ‘the amounts involved were not insignificant’.
The chairman and chief executive of dvd.co.uk, Martin Hogarty, said that they were delighted with the acquisition of Blah and looked forward to developing the brands as part of a growth strategy.
Senator Ozouf said that although the loss of a business such as Blah was regrettable, firms would always be involved in mergers and acquisitions.
However, the Island’s fulfilment business continued to grow and only last week he had dealt with applications from some companies to increase staff numbers.
Last year Jersey Post handled more than 500,000 Blah items sent to 50 countries, including Australia, Russia and America. Jersey Post commercial director Andrew Starkey said that this was a ‘significant and important loss of business’ but not entirely unexpected.
‘The volumes being dispatched by Blah this year were not as high as last year,’ he said.
However, Mr Starkey said that the loss of business would not impact on Jersey Post operations in the immediate or medium term.
