Virgin Megastores is an international chain of
record shopA record shop is an outlet that sells recorded music. Although vinyl records and audio cassettes are no longer sold in the majority of music stores, in favour of compact discs, people still use the term "record shop", in conjunction with "CD shop" or "music shop".Originally record shops were...
s, founded by Sir
Richard BransonSir Richard Charles Nicholas Branson is an English industrialist, best known for his Virgin brand of over 360 companies. Branson's first successful business venture was at age 16, when he published a magazine called Student. He then set up an audio record mail-order business in 1970...
on London's
Oxford StreetOxford Street is a major thoroughfare in London, England in the City of Westminster. With over 300 shops, it is Europe's busiest shopping street, as well as the most dense. The street derives its name from being part of the old London—Oxford Road which began at Newgate, City of London...
in January or February 1971 (exact date uncertain). Virgin Megastores are best described today as entertainment retailers.
In 1979 the company opened their first Megastore at the end of
Oxford StreetOxford Street is a major thoroughfare in London, England in the City of Westminster. With over 300 shops, it is Europe's busiest shopping street, as well as the most dense. The street derives its name from being part of the old London—Oxford Road which began at Newgate, City of London...
and
Tottenham Court RoadTottenham Court Road is a street in Central London, England, running from St Giles' Circus north to Euston Road, near the border of the City of Westminster and the London Borough of Camden, a distance of about three-quarters of a mile...
. The company expanded to hundreds of stores worldwide in the 1990s, but has lost a large number of stores in recent years. Virgin Megastores in the UK was sold to a company called Zavi and recently that has shut down due to sales. Current operations are mainly in France, Australia and the Middle East, consisting of over 100 stores.
Branson's early business ventures
Richard Branson &
Nik PowellNik Powell is one of the co-founders of the Virgin Group with Richard Branson. After operating a mail-order company, a small record shop, and a recording studio, the partners established Virgin Records in 1972. It became one of the UK's major recording labels until it was sold to EMI in 1992...
had initially run a small record shop called
Virgin Records and Tapes on
Notting Hill GateNotting Hill Gate is one of the main thoroughfares of Notting Hill, in the Royal Borough of Kensington and Chelsea. Historically the street was a location for toll gates, from which it derives its modern name.- Location :...
,
London[]London is the capital of England and the United Kingdom. It has been a major settlement for two millennia, and the history of London goes back to its founding by the Romans, when it was named Londinium. London's core, the ancient City of London, the 'square mile', retains its medieval boundaries...
, specialising particularly in "
krautrockKrautrock is a generic name for the experimental music scene that appeared in Germany in the late 1960s and gained popularity throughout the 1970s, especially in Britain...
" imports, and offering bean bags and free vegetarian food for the benefit of customers listening to the music on offer. After making the shop into a success, they turned their business into a fully fledged record label,
Virgin RecordsVirgin Records is a British record label founded by English entrepreneur Richard Branson, Simon Draper, and Nik Powell in 1972. It was later sold to Thorn EMI, and then, in the US, merged with Capitol Records in 2007 to create the Capitol Music Group....
. The name
Virgin, according to Branson (in his autobiography), arose from a colleague of his when they were brainstorming business ideas. She suggested Virgin - as they were all new to business - like "virgins". The first release on the label was the
progressive rockProgressive rock is a form of rock music that evolved in the late 1960s and early 1970s as part of a "mostly British attempt to elevate rock music to new levels of artistic credibility."...
album
Tubular BellsTubular Bells is the debut record album of English musician Mike Oldfield, released in 1973. Vivian Stanshall provided the voice of the "Master of Ceremonies" who reads off the list of instruments at the end of the first movement...
by multi-instrumentalist
Mike OldfieldMichael Gordon "Mike" Oldfield is an English multi-instrumentalist musician and composer, working a style that blends progressive rock, folk, ethnic or world music, classical music, electronic music, New Age and more recently dance. His music is often elaborate and complex in nature...
in
1973-January–April:*January 9 - Mick Jagger's request for a Japanese visa is rejected on account of a 1969 drug bust, putting an abrupt end to The Rolling Stones' plans to perform in Japan during their forthcoming tour of Hawaii, Australia and New Zealand....
.
Virgin Megastores
Virgin's first formal store opened on London's
Oxford StreetOxford Street is a major thoroughfare in London, England in the City of Westminster. With over 300 shops, it is Europe's busiest shopping street, as well as the most dense. The street derives its name from being part of the old London—Oxford Road which began at Newgate, City of London...
in January or February 1971 (exact date uncertain). In 1979 the company opened their first Megastore at the end of
Oxford StreetOxford Street is a major thoroughfare in London, England in the City of Westminster. With over 300 shops, it is Europe's busiest shopping street, as well as the most dense. The street derives its name from being part of the old London—Oxford Road which began at Newgate, City of London...
and
Tottenham Court RoadTottenham Court Road is a street in Central London, England, running from St Giles' Circus north to Euston Road, near the border of the City of Westminster and the London Borough of Camden, a distance of about three-quarters of a mile...
. Virgin Megastores and Virgin Records operate as entirely separate entities, like many of the other Virgin companies. Throughout the 1980s and 1990s Virgin Megastores opened over 100 stores in the UK, and many others around the world. Simon Wright - Chief Executive of the Virgin Entertainment Group from 1999 to 2007 was very instrumental in the worldwide growth of the stores in particular developing the stores in Asia, the Middle East, Australia and North America before their eventual disposals under license detailed under Ownership.
Ownership
Like many of Branson's Virgin brands, Virgin Megastores is not wholly owned by the
Virgin GroupVirgin Group Ltd is a branded venture capital organisation founded by British business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company;...
. During the early to mid 2000s Virgin Group decided to sell off most of its Virgin Megastores to various companies, including the
Lagardere GroupLagardère SCA is a French conglomerate formerly known as Matra, with holdings in publishing, retail, media, and aerospace. The firm is a société en commandite par actions or limited partnership.-History:...
. By 2001 the Virgin Megastores worldwide were split between the
Virgin GroupVirgin Group Ltd is a branded venture capital organisation founded by British business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company;...
and the
Lagardère GroupLagardère SCA is a French conglomerate formerly known as Matra, with holdings in publishing, retail, media, and aerospace. The firm is a société en commandite par actions or limited partnership.-History:...
. The
Virgin GroupVirgin Group Ltd is a branded venture capital organisation founded by British business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company;...
kept the UK, Ireland, USA and Japan outlets while the
Lagardère GroupLagardère SCA is a French conglomerate formerly known as Matra, with holdings in publishing, retail, media, and aerospace. The firm is a société en commandite par actions or limited partnership.-History:...
obtained the shops in France and travel retail locations globally including Australia, China,
United Arab EmiratesThe United Arab Emirates is a federation of seven emirates situated in the southeast of the Arabian Peninsula in Southwest Asia on the Persian Gulf, bordering Oman and Saudi Arabia. The UAE consists of seven states, termed emirates, which are Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras...
,
QatarQatar , also known as the State of Qatar or locally ', is an Arab emirate in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the larger Arabian Peninsula...
, Greece,
EgyptEgypt , officially the Arab Republic of Egypt, is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Western Asia...
and
LebanonLebanon , officially the Republic of Lebanon
[Republic of Lebanon is the most common term used by Lebanese government agencies...]
.
Virgin Megastores in the Middle East currently trades as V Star Multimedia LLC. Culture Convenience Club owns what was Virgin Megastores Japan, which have since been rebranded as Tsutaya. The Australian stores are operated by
SanitySanity is an Australian chain of music and entertainment stores, owned by Brazin Limited. Sanity has over 275 outlets in Australia, 190 trade under the Sanity brand while 86 of them are branded as Virgin. They specialise in the sale of CDs, DVDs, Video Games and related accessories...
; Sanity also run some of their stores under the HMV banner, and their own brand. In December 2007
Butler Capital PartnersButler Capital Partners is a European private equity focusing primarily on investments in France and Europe. The firm operates in a variety of business sectors including distribution, logistics, advertising, information technology, publishing and market research.The firm was founded in 1990 by...
announced their intention to mount a majority takeover of the French arm of Virgin from Lagardère. This deal was finalised in February 2008.
In 2007 the real estate company Related Companies and
Vornado Realty TrustVornado Realty Trust is a New York based real estate investment trust. It is the inheritor of real estate formerly controlled by companies including Two Guys and Alexander's.- History :...
acquired Virgin Megastores North America. They have since made the decision to close all of the American stores.
The UK and Irish underwent a management buy-out in September 2007 which resulted in the Managing Directors taking the company on as the largest independent entertainment retailer in the UK. Extensive rebranding to "
ZavviZavvi was an entertainment retail chain in the United Kingdom and Republic of Ireland, originally Virgin Megastores. Zavvi was formed in September 2007 when a management buy-out team purchased the company from Sir Richard Branson's Virgin Group...
" took place in November 2007. In late 2008 Zavvi entered administration, and then closed the majority of its stores, selling some to rival HMV, and a few to
Head EntertainmentHead Entertainment is an entertainment retail chain in the United Kingdom. The company was formed on 18 February 2009 when Simon Douglas, former managing director of Zavvi and business partner Les Whitfield, purchased five stores from Zavvi Entertainment Group which was placed in administration on...
.
| Territory |
Owner/Operator |
Currently Virgin branded? |
Currently operating? |
Number of locations |
| UK and Ireland |
Zavvi |
No (sold in 2007) |
No (closed in 2009) |
125 (at time of sale - all now closed) |
| France |
Butler Capital PartnersButler Capital Partners is a European private equity focusing primarily on investments in France and Europe. The firm operates in a variety of business sectors including distribution, logistics, advertising, information technology, publishing and market research.The firm was founded in 1990 by...
(80%) / Lagardère GroupLagardère SCA is a French conglomerate formerly known as Matra, with holdings in publishing, retail, media, and aerospace. The firm is a société en commandite par actions or limited partnership.-History:...
(20%) |
Yes |
Yes |
35 |
| Australia |
Sanity Sanity is an Australian chain of music and entertainment stores, owned by Brazin Limited. Sanity has over 275 outlets in Australia, 190 trade under the Sanity brand while 86 of them are branded as Virgin. They specialise in the sale of CDs, DVDs, Video Games and related accessories...
|
Yes |
Yes |
24 |
| USA |
Virgin Entertainment Group (Related Companies / Vornado Realty TrustVornado Realty Trust is a New York based real estate investment trust. It is the inheritor of real estate formerly controlled by companies including Two Guys and Alexander's.- History :...
) |
Yes (until closing) |
No (closed in 2009) |
23 (at peak) |
| Japan |
Tsutaya Stores Holdings |
No (rebranded as Tsutaya in 2009) |
Yes (as Tsutaya) |
22 (in 2005) |
| Middle East |
V Star Multimedia (Butler / Lagardère) |
Yes |
Yes |
18 |
| Greece |
Vivere Entertainment |
Yes |
Yes |
15 (in 2005) |
| Spain |
Virgin Entertainment Group |
Yes (at time of closing) |
No (closed in 1998) |
9 |
| Germany |
HDS Retail Hachette Distribution Services is the distribution arm of French media group Hachette. In Canada and the United States they operate a specialty retail chain under the name HDS Retail. HDS Retail chains are found in airports, hotels, and malls across North America....
|
Yes (not Megastore) |
Yes |
4 |
| The Netherlands |
Free Record Shop group |
No |
No |
4 |
| Canada |
Virgin Entertainment Group |
No (sold to HMV) |
Yes (as HMV) |
1 |
Product range
Virgin shops have a wide selection of CDs, games, books,
DVDDVD, also known as Digital Versatile Disc or Digital Video Disc,is an optical disc storage media format, and was founded in 1995. Its main uses are video and data storage...
s,
vinyl recordA gramophone record, commonly known as phonograph record, vinyl record, or simply record, is an analog sound storage medium consisting of a flat disc with an inscribed modulated spiral groove usually starting near the periphery and ending near the centre of the disc...
s,
MP3MPEG-1 Audio Layer 3, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression. It is a common audio format for consumer audio storage, as well as a de facto standard of digital audio compression for the transfer and playback of music on...
players, magazines, accessories and additional products such as calendars, board games, and
VirginVirgin Group Ltd is a branded venture capital organisation founded by British business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company;...
branded items. Note that not all of these products (e.g. vinyl) are stocked by all Virgin shops, though the larger stores do stock the full product range. All US Stores have increased their focus on fashion. Other categories of fashion (Pop culture, Street, Urban, Movie & TV) complement the music, DVD and video games offers. Virgin Mobile products can also be found in separately run Virgin Mobile Concessions within most Virgin Megastores. Some shops also house cafes/coffee shops run by external companies.
Technology
In 2005,
Virgin DigitalVirgin Digital was an online music store operated in the United Kingdom and United States by the Virgin Group. It launched on September 2, 2005 in the UK, and was refreshed in November 2006 to run through an internet browser, rather than the former Virgin Digital Player...
was launched to cater for those that bought their music digitally or wanted to rip and burn their current music collection. This is designed to add to the services provided by Virgin, rather than replace the Megastores. The download service has faced some criticism from consumer groups due to its incompatibility with the popular
iPodiPod is a brand of portable media players designed and marketed by Apple and launched on . The product line-up includes the hard drive-based iPod Classic, the touchscreen iPod Touch, the video-capable iPod Nano, and the compact iPod Shuffle. The iPhone can function as an iPod but is generally...
music players. The service has since been discontinued. Around the world there are other Virgin branded digital music retail websites, such as VirginMega.fr, France's number 2 music download website.
Operations
France
There are 35 Virgin Megastores in France. 12 additional stores in France are branded Furet du Nord, and about 10 international stores are owned by the same company.
Lagardère GroupLagardère SCA is a French conglomerate formerly known as Matra, with holdings in publishing, retail, media, and aerospace. The firm is a société en commandite par actions or limited partnership.-History:...
bought the chain in 2001. In December 2007 Butler Capital Partners announced their intention to mount a majority takeover of the French arm of Virgin from Lagardère. This deal was finalised in February 2008. According to the Lagardère 2007 report, 80% of the Virgin stores was to be sold by Lagardère Services at a value of €76.4 million, and 20% would be kept. Prior to this sale 51% of VirginMega, France's number 2 music download website, was transferred to the Virgin Stores company (sold to Butler), and the remaining 49% was kept by Lagardère Active.
In March 2008 the French Megastores enlisted Kyriba Corporation's real-time, on-demand cash and treasury management solution.
Germany
Virgin Megastore withdrew from the German market in 1994, amid complaints that the country's
shop-closing lawIn the Federal Republic of Germany, the Ladenschlussgesetz or "Shop Closing Law" is the federal law regulating at which times retail stores were required to be closed to the public...
was too restrictive. However, Virgin returned to Germany with a new store (not a "Megastore") that opened in the
Berlin Hauptbahnhof', or Berlin Central Station, is the main railway station in Berlin, Germany and the largest crossing station in Europe. It began full operation two days after a ceremonial opening on 26 May 2006. It is now Europe's largest two-level railway station...
central station in Berlin in May 2006. There are now 4 Virgin stores in Germany, operated by
HDS RetailHachette Distribution Services is the distribution arm of French media group Hachette. In Canada and the United States they operate a specialty retail chain under the name HDS Retail. HDS Retail chains are found in airports, hotels, and malls across North America....
.
Greece
As of June 2005 there are 15 Virgin Megastores in
GreeceGreece , officially the Hellenic Republic , is a country in southeastern Europe, situated on the southern end of the Balkan Peninsula....
, and on the island of
CreteCrete is the largest of the Greek islands and the fifth largest island in the Mediterranean Sea at 8,336 km²...
, operated by Vivere Entertainment.
The Netherlands
Virgin Megastores entered the Dutch market in the 1990s and operated four stores (Amsterdam, Rotterdam, The Hague and Maastricht). In 2000, it decided to exit the market. Three stores were sold to the Free Record Shop group, while the Maastricht branch was closed. Free Record Shop also acquired three Virgin Megastores in Belgium.
Spain
In June 1998 the 9 Virgin Megastores closed including its southern European flagship store in
BarcelonaBarcelona is the capital, most populous city of the Autonomous Community of Catalonia and the second largest city in Spain, with a population of 1,615,908 in 2008. It is the 11th-most populous municipality in the European Union and sixth-most populous urban area in the European Union after Paris,...
. Currently this building is occupied by
ZaraZara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega, who also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius and Bershka. The group is headquartered in A Coruña, Galicia, Spain, where the first Zara store opened in 1975...
clothes store.
UK / Ireland
The first Virgin Megastore opened in the United Kingdom in 1979.
Between the 1980s and 1990s, the chain grew, most notably through its merger with
Our PriceOur Price was a chain of record stores in the United Kingdom and Republic of Ireland from the 1970s until the late 1990s. Originally founded in 1972 by Gary Nesbitt, Edward Stollins and Mike Isaacs, early stores were branded "The Tape Revolution" and concentrated on the then-new compact cassette...
whilst under the ownership of WH Smith. By the 1990s Virgin Megastores had become an international franchise as part of the
Virgin GroupVirgin Group Ltd is a branded venture capital organisation founded by British business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle, among others. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding company;...
.
In 2007 the Virgin Group was looking to sell the UK and Ireland stores. On 17 September 2007, it was announced that the UK and Ireland arm of the Virgin Megastores brand was to break away from the Virgin Group. A management buy-out offer was accepted.
EUKEntertainment UK Limited is a retail supply and distribution company and a wholly-owned subsidiary of Woolworths Group plc. The company, along with Woolworths plc, entered administration with Deloitte & Touche on 28 November 2008...
, the company's main stock supplier, also the supplier to shops like
WoolworthsWoolworths Group plc was a British group which owned the high-street retail chain, Woolworths, as well as other brands such as the entertainment distributor Entertainment UK and book and resource distributor Bertram Books...
and Sainsbury's, have helped out with the MBO by investing heavily to support the new management team. With the change of ownership the Virgin Megastores disappeared and were replaced with a new name '
ZavviZavvi was an entertainment retail chain in the United Kingdom and Republic of Ireland, originally Virgin Megastores. Zavvi was formed in September 2007 when a management buy-out team purchased the company from Sir Richard Branson's Virgin Group...
'. All 125 stores remained trading and the change was fully implemented by late November 2007. In January 2008 the online system was also rebranded to "zavvi.co.uk" and Virgin Megastores Ireland changed to 'Zavvi Ireland'.
On
Christmas EveChristmas Eve, December 24, is the night before Christmas Day, which celebrates the birth of Jesus Christ.-Western Churches:Many Roman Catholics and Anglicans traditionally celebrate a midnight Mass which begins sometime before midnight on Christmas Day; this ceremony, which is held in churches...
, 24 December 2008, the "Zavvi UK" group went into
administrationAdministration, as a legal concept, is a procedure under the insolvency laws of a number of common law jurisdictions. It functions as a rescue mechanism for insolvent companies and allows them to carry on running their business...
owing to the loss of its supplier, EUK. Simon Douglas, the founder of the entertainment retailer stated, "We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, have been too much for the business to cope with." By February 2009 Zavvi had closed its stores, selling some to rival HMV, and a few to Simon Douglas and Les Whitfield's
Head EntertainmentHead Entertainment is an entertainment retail chain in the United Kingdom. The company was formed on 18 February 2009 when Simon Douglas, former managing director of Zavvi and business partner Les Whitfield, purchased five stores from Zavvi Entertainment Group which was placed in administration on...
.
In-stores
A service called Virgin Music Radio (VMR, later
Virgin RadioAbsolute Radio is one of the UK's three Independent National Radio stations. The station rebranded to its current name at 7.45am on 29 September 2008.The station is based in London and plays popular rock music...
used to broadcast from its home in the Oxford Street store to the rest of the Megastores. Later this service was stopped and shops played CDs from stock over their own in-shop stereo systems.
Employees of Virgin Megastores and Virgin XS/Xpress in the UK and in the Republic of Ireland (with exception Virgin XS/Xpress stores were not in Ireland) wore Virgin branded black T-Shirts with "Need Help? Just Ask" written on the front and "The V Team" on the back. Senior members of staff wore a MOD (Manager On Duty) lanyard. Only the Assistant Manager and Store Manager wore name badges, which also stated their position.
Technology
The computer system at the heart of the UK Virgin Megastores was
ELVIS (
EPoSEpos may refer to:* Electronic Point of sale device which enables an efficient recording of the sale of goods or services to the customer.* Epos - please see epic poetry* Epos Ltd...
Linked Virgin Information System) which was designed for Virgin in 1991. ELVIS collects data from shop's point-of-sale terminals for stock and sales reporting; provides instant information for customers on all the shop's product lines, holds play list information for Virgin Megastore Radio (accessible by all shops simultaneously); and allows for electronic re-ordering from suppliers. As of September 2006 ELVIS was updated to utilise Real Time Polling. This means that now all inventory updates every 15 minutes, giving an accurate representation of on hand stockholding as well as being a useful tool for producing Best-Seller reports.
Virgin also had an online service, http://www.virginmegastores.co.uk, which stocked the same entertainment products as the high street shops and had a 48-hour home delivery guarantee with gift wrapping. An individual service is used by stores to deliver items currently out of stock to customers. The system is called 'Web-Enabled Store' (WES).
Virgin XS
Virgin XS became the clearance arm of Virgin when they were taken over from Sound and Media. Who had set them up to sell off overstocks and deletions from all the major record companies. There were approximately 17 Virgin XS shops and they were all located in mainly small units within factory outlet centres throughout the UK. Virgin XS shops stocked the same charts as normal Virgin Megastores but they also sold all Virgin Megastores sleeveless stock (stock without their original packaging) at reduced prices as well as having various multibuy offers on back catalogue stock.
The chain was originally part of the Sound and Media Group (which itself was part of the Virgin Group). The Virgin XS stores were also sold to Zavvi in 2007. These stores did not retain any distinction between them and the ordinary Zavvi stores, as they carried the standard Zavvi branding. All the Outlet stores were closed in January 2009 due to Zavvi entering administration.
Competition
As more and more high street shops and e-tailers enter the entertainment sales market, it becomes more competitive. Big name supermarket chains in particular stock popular music and DVDs at ever-lower prices. The video game market is also increasingly competitive. These trends have affected Virgin Megastores profits. A report published in August 2005 stated that Virgin Megastores had lost £260m in the past two years according to accounts filed with Companies House, and remained solvent only with the help of significant loans from other Branson companies. The retail chain borrowed £287m from related companies in the Virgin group, a debt that grew by £117m in the financial year to March 2004. Chairman
John JacksonJohn Jackson may refer to:Politics:* John Jackson , mayor of Tampa, Florida* John Jackson , Member of Parliament for Plymouth Devonport 1910 to 1918* John Edward Jackson, British diplomat...
, a long-standing Branson lieutenant, said that since then the retailer had borrowed more from the parent company. Virgin Megastores planned to break even in the 2006-2007 financial year. "A lot of hard work has been done to get the business into good shape," he said. Jackson said the first 18 weeks of 2006-7 had shown like-for-like sales similar to the year before, which was better than in the overall entertainment market.
The lenders in other Branson companies are charging the retail chain 14% interest. A Virgin Group source said the company charges the rates that a venture capital firm would expect as a return. The accounts stated that the music and video retailing business was still a "going concern" because the parent company had formally said that it would provide enough funding for it to trade for at least 12 months. According to the accounts filed in Companies House, the Virgin Megastores group made an operating loss of £112m in the 14 months to the end of March 2004 due to escalating costs at the retail chain and the cost of re-organisation. A contributing factor was the inclusion in the accounts of the loss-making smaller shops, which were closed. Jackson said this should also lead to a loss for the next financial year.
The year before, the operating loss had been £146m due to a writedown of the
Our PriceOur Price was a chain of record stores in the United Kingdom and Republic of Ireland from the 1970s until the late 1990s. Originally founded in 1972 by Gary Nesbitt, Edward Stollins and Mike Isaacs, early stores were branded "The Tape Revolution" and concentrated on the then-new compact cassette...
chain, which was bought from WH Smith in the late 1990s but struggled and was turned into V Shops in 2001. Turnover increased in the 14 months to the end of March, compared with the 12-month period previously, because the smaller shops were included.
"During the year, the group encountered a difficult trading environment with significant price competition being experienced, in particular from supermarkets, that affected sales and margins," the company said in a review of the business in its accounts.
It said this prompted a "strategic review", which led to a £31m charge to cover leases and other restructuring costs. Despite massive amounts of money being spent on refits over the last few years and more focus being spend on their bigger shops the company as a whole struggled to break even, no profit being made during the period 2002 - 2006. Sales of HMV Europe, Virgin's biggest competitor, grew to £986.0 million with operating profit of £96.8 million for the full year ended April 2005.
In response to the increasing choices available to purchasers of entertainment media, the Virgin chain had employed several strategies in an attempt to secure customer loyalty, and focussed on higher standards of customer service. The 'Addict card' was introduced in 2005, offering customers a stamp for every £10 spent in the shop; 10 stamps entitled the customer to £10 off their next purchase. Also introduced was the 'Mega-sharp' approach to customer service: staff were encouraged always to ensure that customers found everything they were seeking.
Competition against independent retailers mainly in the music sector did not pose a major threat for big companies such as the Megastores at the time of the Zavvi rebranding. However, customers with a specialist taste usually found the independent shops more appealing, offering more hard-to-find and rarer titles also the growing competition from online retailers. In 2009 when Zavvi closed, some stores were sold to rival HMV, and some were transferred to
Head EntertainmentHead Entertainment is an entertainment retail chain in the United Kingdom. The company was formed on 18 February 2009 when Simon Douglas, former managing director of Zavvi and business partner Les Whitfield, purchased five stores from Zavvi Entertainment Group which was placed in administration on...
.
Arab World
The owners of Virgin Megastores in the
Arab WorldThe Arab World refers to Arabic-speaking countries stretching from the Atlantic Ocean in the west to the Arabian Sea in the east, and from the Mediterranean Sea in the north to the Horn of Africa and the Indian Ocean in the southeast...
is V-Star Multimedia. There are currently stores open in
SyriaSyria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the west, Turkey to the north, Iraq to the east, Jordan to the south and Israel to the southwest....
,
BahrainThe Kingdom of Bahrain is a small island country in the Persian Gulf ruled by the Al Khalifa royal family. Saudi Arabia lies to the west and is connected to Bahrain via the King Fahd Causeway, which was officially opened on the 25th of November 1986. Qatar is to the southeast across the Gulf of...
,
EgyptEgypt , officially the Arab Republic of Egypt, is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Western Asia...
,
JordanJordan , officially the Hashemite Kingdom of Jordan, is a country in Western Asia spanning the southern part of the Syrian Desert down to the Gulf of Aqaba. Jordan shares borders with Syria to the north, Iraq to the northeast, Saudi Arabia to the east and south, the Gulf of Aqaba to the southwest,...
,
KuwaitThe State of Kuwait is a sovereign Arab emirate bordered by Saudi Arabia to the south and Iraq to the north and west. The greatest distance from north to south is 200 km and from east to west 170 km . The name is a diminutive of an Arabic word meaning "fortress built near water." It has a...
,
QatarQatar , also known as the State of Qatar or locally ', is an Arab emirate in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the larger Arabian Peninsula...
, and the UAE. Lebanon and Saudi Arabia are owned by Megastores of Lebanon S.A.L. There are plans to open more stores in
OmanOman , officially the Sultanate of Oman , is an Arab country in southwest Asia on the southeast coast of the Arabian Peninsula. It borders the United Arab Emirates on the northwest, Saudi Arabia on the west and Yemen on the southwest....
.
Syria
In early 2009, Virgin Megastore launched its first stores in
SyriaSyria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the west, Turkey to the north, Iraq to the east, Jordan to the south and Israel to the southwest....
. It is located in Shahba Mall in
AleppoAleppo is a city in northern Syria, the second largest Syrian city and the capital of the Aleppo Governorate; the Governorate extends around the city for over 16,000 km² and has a population of 4,393,000, making it the largest Governorate in Syria by population...
.
Saudi Arabia
As of November 2008, there is one Virgin Megastore in Saudi Arabia. It is located on Tahliah Street in the Roshana Centre in
JeddahJeddah is a Saudi Arabian city located on the coast of the Red Sea and is the major urban center of western Saudi Arabia. It is the largest city in Makkah Province, the largest sea port on the Red Sea, and the second largest city in Saudi Arabia after the capital city, Riyadh...
.
Bahrain
As of September 2008, there is currently one Virgin Megastore in
BahrainThe Kingdom of Bahrain is a small island country in the Persian Gulf ruled by the Al Khalifa royal family. Saudi Arabia lies to the west and is connected to Bahrain via the King Fahd Causeway, which was officially opened on the 25th of November 1986. Qatar is to the southeast across the Gulf of...
. It is in the Bahrain City Centre.
Egypt
As of June 2008, there are two Virgin Megastores in
EgyptEgypt , officially the Arab Republic of Egypt, is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Western Asia...
. One is located in the City Stars (Cairo) Shopping Mall and the other is in
Sharm el-SheikhSharm el-Sheikh , is a city situated on the southern tip of the Sinai Peninsula, in South Sinai Governorate, Egypt, on the coastal strip between the Red Sea and Mount Sinai with a population of approximately 35,000 ....
.
Kuwait
As of May 2008 there is one Virgin Megastores in
KuwaitThe State of Kuwait is a sovereign Arab emirate bordered by Saudi Arabia to the south and Iraq to the north and west. The greatest distance from north to south is 200 km and from east to west 170 km . The name is a diminutive of an Arabic word meaning "fortress built near water." It has a...
at Marina Mall in
SalmiyaSalmiya located 12 kilometers southeast of Kuwait City, is one of the largest areas in Kuwait consisting of both commercial and residential areas with a population of 223,640 as of January 2007. It is arguably Kuwait's flagship district being a major cultural and commercial hub...
.
Lebanon
Virgin's main store in Lebanon is located in the old Opera house on Martyrs' Square,
Beirut Central DistrictThe Beirut Central District is the name given to Beirut’s historical and geographical core, the “vibrant financial, commercial, and administrative hub of the country.”...
; it opened on the 3rd of July 2001. the four level store's inauguration was attended by then
Prime MinisterA prime minister is the most senior minister of cabinet in the executive branch of government in a parliamentary system. The position is usually held by, but need not always be held by, a politician. In many systems, the prime minister selects and can dismiss other members of the cabinet, and...
Rafic Hariri as well as Virgin's founder
Richard BransonSir Richard Charles Nicholas Branson is an English industrialist, best known for his Virgin brand of over 360 companies. Branson's first successful business venture was at age 16, when he published a magazine called Student. He then set up an audio record mail-order business in 1970...
. There are also smaller stores at
ABC MallABC Group or ABC department stores is one of the leading retailer in the Middle East with about 60000 sq m of retail space and 8 outlet stores...
AchrafiehAchrafieh, , is one of the oldest Christian districts of East Beirut, Lebanon. It is located on a hill in the eastern part of Beirut alongside the shore. Achrafieh is both a residential and commercial district characterized by narrow winding streets and prestigious large apartment and office...
, CityMall
DoraDora is a suburb north of Beirut in the Matn district of Mount Lebanon. The suburb has commercial and residential zones.-Demographic:Dora is a mainly Christian suburb of Beirut but Lebanese of other faiths also call the suburb home...
, and in the northern city of
TripoliTripoli is the largest and capital city of Libya.Tripoli has a population of 1.69 million...
.
Qatar
Virgin Megastores currently has one store in
QatarQatar , also known as the State of Qatar or locally ', is an Arab emirate in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the larger Arabian Peninsula...
, located in the Villaggio Mall (Italian themed mall),
DohaDoha is the capital city of Qatar. Located on the Persian Gulf, it has a population of 400,051 according to the 2005 census,, and is also one of the municipalities of Qatar...
which is the shopping centre's main anchor. Recently in November 2008 they opened a smaller store in a shopping centre called Landmark.
United Arab Emirates
The first Virgin Megastore in the Arab World opened in the United Arab Emirates. As of December 2008, There are six Virgin Megastores in the UAE. One is located in the
Mercato Shopping MallMercato Shopping Mall is a shopping centre in Jumeirah, Dubai, United Arab Emirates. The mall is designed to look like a Mediterranean town during the European Renaissance in either Italy, France, or Spain. Opening in 2002, the mall cost 120 million dirhams. The name "mercato" comes from the...
, a renaissance architecural style, a second in the
BurJumanBurJuman is a shopping mall in Dubai, United Arab Emirates . Located on Khalid bin Al Waleed Street in Bur Dubai, BurJuman is considered to be one of the oldest malls in the country. An underground Dubai Metro station for the Red Line and Green Line is currently situated at this location...
Shopping Mall, a third in The Mall of Emirates which is the biggest Virgin Megastore in the UAE, a forth is in
Abu Dhabi MallAbu Dhabi Mall is currently the largest mall in the Abu Dhabi Emirate, ahead of the recently renovated, Marina Mall. Abu Dhabi Mall comprises more than 200 stores, including a Cineplex, supermarkets, a large hypermarket as well as a large food court...
, a fifth one is in DCC and sixth one in
JBRJBR may refer to:* JonBenét Ramsey, an American girl famous for her participation in beauty pageants and her 1996 murder* Jumeirah Beach Residence, the largest single-phase residential development in the world; located in Dubai...
"The WALK" . As well as being a entertainment retailer, the company also acts as a venue, with artist signings, quiz nights and a newly launched boutique section offering everything from movie memorabilia to jewellery.
Jordan
There is a Virgin Megastore in City Mall in
AmmanAmman , sometimes spelled Ammann , is the capital city of the Hashemite Kingdom of Jordan, a city of 2,525,000 inhabitants , and the administrative capital and commercial center of Jordan. It is also the largest city in Jordan. It is one of the oldest continuously inhabited cities in the world...
, which opened on 5 September 2007.
USA
The first Virgin Megastore in the United States opened in 1992 on
Sunset StripThe Sunset Strip is the name given to the mile and a half stretch of Sunset Boulevard that passes through West Hollywood, California. It extends from West Hollywood's eastern border with Hollywood at Crescent Heights Boulevard, to its western border with Beverly Hills at Doheny Drive...
in
Los AngelesLos Angeles is the largest city in the state of California and the second largest in the United States. Often abbreviated as L.A. and nicknamed The City of Angels, Los Angeles has an estimated population of 3.8 million and spans over in Southern California...
, which was closed in 2008 and is currently being converted to other stores. At its peak, there were 23 Megastores in the US which generated $280 million annually. The US stores were purchased by Related Companies and Vornado Realty Trust in 2007.
Store closures
Under new ownership, from eleven US stores in 2007, many were gradually closed. On 2 March 2009, it was announced all Virgin Megastores in the USA would close
The store at
Arden Fair MallArden Fair Mall is a two-level regional shopping mall located on Arden Way in Sacramento, California, USA. It consists of over 165 tenants, encompassing over of retail space. It is anchored by JCPenney, Macy's, Nordstrom and Sears...
in Sacramento, CA closed in 2007 and converted to an Urban Outfitters, while the
Grapevine MillsGrapevine Mills is a large shopping mall located in Grapevine, Texas, which is located in the Dallas-Fort Worth Metroplex. Grapevine Mills currently totals over in size. The mall also includes a Bass Pro Shops, although not connected physically. Grapevine Mills opened on October 30, 1997 and is...
location was closed at the end of 2008. Related Companies announced that the Virgin Megastore flagship in Times Square would close by April, 2009 of that year, with the space being replaced by
Forever 21Forever 21 is a chain of clothing retailers throughout the United States, Philippines, Canada, Singapore, Indonesia, Malaysia, United Arab Emirates, Jordan, Oman, Kuwait, Saudi Arabia, Bahrain, Thailand, China, South Korea, Japan, and Puerto Rico [June 2009] offering fashion and accessories for...
. On 25 February 2009 it was announced that the stores in San Francisco and
Union Square (New York)Union Square is an important and historic intersection in New York City, located where Broadway and the former Bowery Road now 4th Avenue, came together in the early 19th century; its name celebrates neither the federal union nor labor unions but rather denotes the fact that "here was the union of...
would close in April and May, and the announcement of all stores closing followed soon thereafter. The Orlando store, located in Disney-operated shopping district,
Downtown DisneyDowntown Disney is an outdoor shopping, dining, and entertainment complex located at the Walt Disney World Resort. Downtown Disney is open to the public, requires no admission fee and offers entirely free parking and transportation to all Disney resorts. The large outdoor complex is divided into...
, closed ahead-of-schedule on 12 May, 2009.
In-stores
Most shops included an in-store radio station, branded Virgin Radio. USA Virgin Radio was not a broadcast radio station, but a DJ operated hard-lines system which broadcasted throughout the store, and the complex in which the store was located. At the
Times SquareTimes Square is a major intersection in Manhattan, a borough of New York City, at the junction of Broadway and Seventh Avenue and stretching from West 42nd to West 47th Streets...
location, DJ selections were heard on the retail floor, in the office areas, processing areas, and even out on the shop's
BroadwayBroadway, as the name implies, is a wide avenue in New York City, which runs the full length of Manhattan and continues into the Bronx. It is the oldest north-south main thoroughfare in the city, dating to the first New Amsterdam settlement. The name Broadway is the English literal translation of...
sidewalk frontage.
All employees of the USA Virgin Megastores could be identified by their trademark red t-shirts which had the Virgin logo on the front and the word STAFF on the back, as well as required lanyards with their first name printed on them.
Technology
The Virgin Megastore chain in the USA had a different GSA look-up system to other the international arms of the chain. This system was a private network that linked all North American shops, updating each shop's product inventory every 24 to 48 hours. The GSA was reportedly accessible from the internet.
Virgin Megastore (US) implemented a near real time data warehouse in 2004. The data warehouse named 'Crescendo' collects POS transactions, along with customer traffic counts and generates KPI reports in near real time. The near real time information helped the managers identify trends quicker and react. The USA shops shared their experience with the real-time warehouse and the UK stores also used similar process.
Virgin Megastore (US) had a Customer Loyalty Program named 'Virgin V.I.P.' The Program used a read/write 'GraphiCard'. Every time a member purchase is made, the Graphicard was swiped through the POS Graphicard Terminal. Members points were instantly updated on the face of the card. The website shared the loyalty program with the US stores.
Website
Virgin Megastores USA's website is VirginMega.com. In 2002 this website became co-branded with
Amazon.comAmazon.com, Inc. is an American-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is America's largest online retailer, with nearly three times the Internet sales revenue of the runner up, Staples, Inc....
, and was powered by Amazon. Later in 2002 VirginMega.co.jp, the Japanese equivalent, followed suit. In 2007 the website was again changed, when Virgin Megastores partnered with
Baker & TaylorBaker & Taylor is the world's largest distributor of books and entertainment, in business for over 180 years. Based in Charlotte, North Carolina, and privately owned, in 2006 it had $2.2 billion in sales, employed 3,750 and was # 181 on Forbes list of privately owned companies...
. On 31 May 2009 VirginMega.com ceased operating.
Canada
The first and only Virgin Megastore in Canada opened in December 1996 on the corner of
Robson StreetRobson Street is a major southeast-northwest thoroughfare in downtown and West End of Vancouver, British Columbia, Canada. Its core commercial blocks from Burrard Street to Jervis are also known as Robsonstrasse. Its name honours John Robson, a major figure in British Columbia's entry into the...
and
Burrard StreetBurrard Street is a major thoroughfare in Vancouver, British Columbia, Canada. It is the central street of Downtown Vancouver and the Financial District. The street is named for Burrard Inlet, located at its northern terminus, which in turn is named for Sir Harry Burrard-Neale.The street starts at...
in Vancouver,
British ColumbiaBritish Columbia is the westernmost of Canada's provinces and is famed for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . In 1871, it became the sixth province of Canada.The capital of British Columbia is Victoria, the 15th largest metropolitan region in Canada...
. The 40,000 square foot, three-level store was located in downtown Vancouver, the city’s busiest and most prestigious retail destination. The building was previously home to the central branch of the
Vancouver Public LibraryFunded by the City of Vancouver, the Vancouver Public Library is the third largest public library system in Canada, with over 395,000 cardholders and more than 8 million item borrowings annually. The central branch opened in Downtown Vancouver on May 26, 1995 and cost 106.8 million CAD to build...
. The Virgin Megastore ceased its operations in Vancouver on 4 September 2005 when on 28 June 2005,
HMVHis Master's Voice is a famous trademark in the music business, and for many years was the name of a large record label. The name was coined in 1899 as the title of a painting of the dog Nipper listening to a wind-up gramophone...
announced it was planning to expand the store and rebrand the location into the HMV brand. The acquisition took effect immediately and on 5 September 2005, HMV was opened. However, due to the dominance of HMV in Canada, Virgin decided to exit the Canadian market entirely.
There were also plans to build its second Canadian store at Toronto Life Square, in downtown Toronto. However, the exit from Canada cancelled these plans. An
AdidasAdidas AG is a German-based sports apparel manufacturer and part of the Adidas Group, which consists of Reebok sportswear company, TaylorMade-adidas golf company, and Rockport. Besides sports footwear, the company also produces other products such as bags, shirts, watches, eyewear and other sports...
Performance store stands where Virgin would have.
Australia
SanitySanity is an Australian chain of music and entertainment stores, owned by Brazin Limited. Sanity has over 275 outlets in Australia, 190 trade under the Sanity brand while 86 of them are branded as Virgin. They specialise in the sale of CDs, DVDs, Video Games and related accessories...
currently operates Virgin Megastores in Australia, along with the Australian operations of HMV and their own Sanity branded stores. There are over 20 Virgin Megastores in Australia.
Japan
In 1990 Virgin Megastores Japan Limited was started as a 50/50 venture between Marui and the Virgin Entertainment Group. In September 1990 first Japanese Virgin Megastore opened in Shinjuku. During the 1990s more Megastores were opened all over Japan. On 19 September 2002, following its American counterpart, the VirginMega.co.jp website became powered by Amazon.co.jp. This website has since disappeared.
In 2005 Culture Convenience Club bought Virgin Megastore's operations (totalling 22 stores) in Japan from Marui Co. By November 2008 the number of Virgin Megastores in Japan had lessened to 15. Culture Convenience Club's licensing contract with Virgin Group for the use of the Virgin Megastore brand had expired, and there was no desire to renew it. As of November 2008 Culture Convenience Club's subsidiary company, Tsutaya Stores Holdings Co., is expected to acquire Virgin Megastores Japan Co. Virgin Megastores Japan are to be rebranded as Tsutaya by early 2009.
External links