The collapse of music retailer Fopp has led to 700 employees losing their jobs, it was confirmed last night.

Administrators Ernst & Young, who were appointed receivers of the company earlier this week, released a statement saying: "It is unfortunate that we have had to make these redundancies, but we are not in a position to re-open the stores until we have the agreement of suppliers who control the licences to sell stock."

The firm also confirmed that Gordon Montgomery, Peter Hill and David Pryde, the company's directors, had lost their jobs.

Fopp's financial troubles were made public last week when the stores shut suddenly for what was described at the time as an "extraordinary stock take". When doors reopened, only cash sales were being accepted and online sales had been frozen. Employees reported that they had not been paid their monthly salaries. Fopp began discussing its options with Ernst & Young soon after.

The administrators remained hopeful however, saying: "We would urge anyone with a genuine interest in taking on stores to contact us immediately." Around 100 Fopp employees, mostly store managers, have kept their jobs for the time being.