UPDATE 1-UK's Zavvi goes into administration

* Ernst & Young appointed administrator

* Company will continue to trade as E&Y seeks buyer

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LONDON, Dec 24 (Reuters) - Zavvi, the entertainment retailer, on Wednesday became the latest British high street victim of the financial crisis as it fell into administration.

Administrators Ernst & Young said in a statement they intended to trade Zavvi UK with a view to selling all or part of the business as a going concern.

Zavvi was formed from a management buy out of the Virgin Megastore division of the Virgin Group last year.

Last month Entertainment UK, Zavvi's main supplier and part of Woolworths Group Plc WLW.L, went into administration.

Ernst & Young said Zavvi Guernsey will be liquidated, while Zavvi Ireland was not subject to any formal insolvency proceedings.

Zavvi trades from 114 stores in the UK and 11 in Ireland, employing 2,363 permanent staff and 1,052 temporary staff.

Reporting by James Davey; Editing by Matthew Scuffham