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Play.com to shut its retail business

January 10 2013

Jersey based online retailer Play.com is to shut its retail business and trade only as a marketplace for other retailers from March, resulting in redundancies for some of its staff in the UK and Jersey.

The once successful retailer, whose unique selling point over rivals such as Amazon was to offer free delivery on orders, blamed the move on the ending of Low Value Consignment Relief, which allowed items less than £15 (previously £18) to be sold to the UK VAT-free. The Low Value Consignment Relief (LVCR) loophole was closed entirely by the UK government in April 2012.

In a statement Play.com said: “Following a strategic review of our business operations we have today announced a company restructure.”

“Moving forward we are intending to focus exclusively on our successful marketplace, which is our main business area, and to phase out the direct-retail part of our business.”

“We would like to reassure our customers that they can continue to shop with us, purchase from an expanding range of products, and still receive the great quality of service they have come to expect.”

This means that the company will now trade without selling items directly to customers. Instead, a bit like Ebay, it will allow other firms to sell goods via its marketplace which it launched successfully in October last year.

A spokesperson confirmed the changes meant that the company was pulling out of Jersey completely, but about 200 staff would be saved and will be left in the restructured company, which will be based in Cambridge.

In September 2011, Play.com was taken over by Japanese e-commerce operator Rakuten who paid just £25m for the company (despite profits of £450 million), which at the time had 14m registered users and was one of the largest and most successful online retailers in the UK.

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