Failed music store Zavvi has been sold by its administrators Ernst and Young to online retailer, the Hut Group, which is based in
Guernsey.
The group already provides VAT-free entertainment products to internet customers of supermarket giants Tesco and Asda, as well as Dixons and WHSmiths, and claims to have 16 per cent of the of the online CD, DVD and games market.
Zavvi's website is already trading through the company, which uses tax loopholes to provide cheaper products.
Speaking to the Guardian, Matt Moulding from the Hut Group explained that 80 per cent of the market share for entertainment products exists
offshore on islands such as
Guernsey and that Zavvi could thrive by moving there.
He said: "If you aren't
offshore you couldn't possibly compete. Your cost price would be above what people would be retailing at."
The move to online retailing comes after Ernst and Young closed over two-thirds of Zavvi high street stores by the beginning of February with the remainder closing two weeks later.
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