|Founded||Oxford Street, London (1971)|
|Founder(s)||Sir Richard Branson|
|Number of locations||Various|
|Area served||Lebanon, United States, Germany, Greece, Egypt, Saudi Arabia, Syria, Bahrain, Qatar, United Arab Emirates, Jordan, Morocco, and China|
|Parent||Butler Capital Partners
|Website||Virgin Megastores International portal
Virgin Store (Germany)
In 1979 the company opened their first Megastore at the end of Oxford Street and Tottenham Court Road. The company expanded to hundreds of stores worldwide in the 1990s, but has lost a large number of stores in recent years, largely with the sale, and eventual closing of the UK, US, Irish, Italian, Spanish, Canadian, Australian, French, Greek and Japanese stores. Current operations are mainly in the Middle East, consisting of over 100 stores.
- 1 History
- 2 Store experience
- 3 Technology
- 4 Operations
- 4.1 Europe
- 4.2 Arab world
- 4.3 North America
- 4.4 Oceania
- 4.5 Asia
- 5 Virgin Books and Music
- 6 See also
- 7 References
- 8 External links
Branson's early business ventures
Richard Branson & Nik Powell had initially run a small record shop called Virgin Records and Tapes on Notting Hill Gate, London, specialising particularly in "krautrock" 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 Records. 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 rock album Tubular Bells by multi-instrumentalist Mike Oldfield in 1973.
Virgin's first formal store opened on London's Oxford Street in January or February 1971 (exact date uncertain). In 1979 the company opened their first Megastore at the end of Oxford Street and Marble Arch. 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 2009 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.
Like many of Branson's Virgin brands, Virgin Megastores is not wholly owned by the Virgin Group. During the early to mid-2000s Virgin Group decided to sell off most of its Virgin Megastores to various companies, including the Lagardere Group. By 2001 the Virgin Megastores worldwide were split between the Virgin Group and the Lagardère Group. The Virgin Group kept the UK, Ireland, USA and Japan outlets while the Lagardère Group obtained the shops in France and travel retail locations globally including Australia, China, United Arab Emirates, Qatar, Greece, Italy, Egypt, Lebanon and Jordan.
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 Virgin Megastores and Virgin at Myer concept stores were operated by Brazin Limited (Sanity Entertainment after 2009) until all were closed in 2010; Brazin also ran local HMV outlets, in addition to their own Sanity brand. 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.
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 "Zavvi" 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 Entertainment, which then announced their closure in December 2009.
|Territory||Megastore owner/operator||Megastores||Books and Music||Number of Megastores|
|UK and Ireland||Zavvi Entertainment Group (2007–2008)||125, all closed|
|France||Butler Capital Partners (80%) / LS Travel Retail (20%)||35, all closed|
|Australia||Brazin Limited/Sanity Entertainment (2001–2010)
HDS Retail Asia Pacific/LS Travel Retail (2004–2012)
|24, all closed|
|USA||Virgin Entertainment Group (Related Companies / Vornado Realty Trust)||23, all closed (2 Virgin Books and Music stores)|
|Japan||Marui Co/Culture Convenience Club/Tsutaya Stores Holdings (1990–2009)||22, all closed|
|Middle East||V Star Multimedia (Butler / Lagardère)||18|
|Greece||Vivere Entertainment||15 in 2005 - all closed|
|Italy||4, all closed|
|Spain||Virgin Entertainment Group||9, all closed|
|Germany||HDS Retail/LS Travel Retail||All closed (5 Virgin Stores)|
|The Netherlands||Free Record Shop group||4, all closed|
|Canada||Virgin Entertainment Group||All closed (1 Virgin Books and Music store)|
Virgin shops have a wide selection of CDs, games, books, DVDs, vinyl records, magazines, portable media players, accessories and additional products such as calendars, board games and Virgin branded items. Larger stores also stock electronic equipment and computer peripherals. Note that not all of these product categories are stocked by all Virgin shops, though the larger stores do generally stock the full product range.
In 2003, all US Stores increased their focus on multiple fashion categories spanning Pop culture, Street, Urban, Movie & TV to 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 or coffee shops run by external companies.
In 2005, Virgin Digital 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 iPod 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.
There were 35 Virgin Megastores in France - VirginMega.FR now operates as an online only retailer. 12 additional stores in France were branded Furet du Nord, and about 10 international stores were owned by the same company. The French Megastore business was launched in 1988 by Branson and Patrick Zelnick, CEO of music publisher Naïve.
Lagardère Group 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.
In July 2012, LS Travel Retail announced that they will phase out the Virgin Entertainment brand in France, commencing 2013, converting all remaining Virgin travel outlets into larger sized Fnac formats stocking the same range in addition to more product lines.
In January 2013, Virgin Megastore France filed for bankruptcy. At that time there were 26 Megastores in France, employing 1,000 people, after two years of cutting over 200 staff and several shops. The company had taken steps to terminate the lease on its flagship Champs-Élysées store in Paris after 25 years on the famous street. In June 2013 the company was finally liquidated and ceased operations after 25 years.
Virgin Megastore withdrew from the German market in 1994, amid complaints that the country's shop-closing law was too restrictive. Virgin returned to Germany with a new store, Virgin Books and Music, that opened in the Berlin Hauptbahnhof central station in Berlin in May 2006. There are now 5 Virgin Stores in Germany, operated by HDS Retail.
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.
UK / Ireland
The first Virgin Megastore opened in the United Kingdom in 1979 and between the 1980s and 1990s, the chain grew, most notably through its merger with Our Price whilst under the ownership of WH Smith. By the 1990s Virgin Megastores had become an international franchise as part of the Virgin Group.
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. EUK, the company's main stock supplier, also the supplier to shops like Woolworths 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 'Zavvi'. 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 Eve, 24 December 2008, the "Zavvi UK" group went into administration following the collapse of Woolworths, which owned Zavvi's 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 Entertainment.
A service called Virgin Music Radio (VMR, later Virgin Radio 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.
The computer system at the heart of the UK Virgin Megastores was ELVIS (EPoS 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 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.
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
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 customers 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 Entertainment.
Virgin entered the Turkish market on March 2011 with a store located in the Demirören shopping centre on Istiklal Street near Taksim, Istanbul. The product mix of books, digital media and electronics failed to compete with better established chains and the store closed in autumn 2012.
The owner of Virgin Megastores in the Arab World is Azadea Group. There are currently stores in Syria, Bahrain, Egypt, Jordan, Qatar, and the UAE. Lebanon and Saudi Arabia are owned by Megastores of Lebanon S.A.L. There are plans to open more stores in Oman. The Morocco stores are directly owned by Virgin.
As of 20 December 2012, there are three Virgin Megastores in Saudi Arabia. They are located on Tahliah Street in the Roshana Centre, Red Sea Mall and on in Jeddah domestic airport in Jeddah and there's one at Dhahran Mall Eastern Province
As of 15 December 2011, there are two Virgin Megastores in Egypt. One is located in the City Stars (Cairo) Shopping Mall and the other is in the Mall of Arabia (6th of October City) opened on 15 December 2011.
As of May 2008, there were two Virgin Megastores in Kuwait: one at Marina Mall in Salmiya, and one at the airport. However, by late 2011 the airport branch was shut down, while the second branch shut down in March 2012.
Virgin's main store in Lebanon is located in the old Opera house on Martyrs' Square, Beirut Central District; it opened on 3 July 2001. The four level store's inauguration was attended by Virgin's founder Richard Branson. There are also smaller stores at ABC Mall Achrafieh, CityMall Dora, as well as in Beirut International Airport.
Virgin Megastores currently has two stores in Qatar, with one being located in the Villaggio Mall (an Italian-themed mall), Doha which is the shopping centre's main anchor. In November 2008 they opened a smaller store in a shopping centre called Landmark.
United Arab Emirates
- Mercato Mall, a renaissance architectural style Mall on the Jumeirah Beach Road
- BurJuman Center
- The Mall of Emirates which has the biggest Virgin Megastore in the UAE
- Deira City Centre
- Mirdif City Centre
- A Virgin Megastore opened in The Dubai Mall in September 2011 with a striking new look
- Abu Dhabi Mall
- The latest UAE store opned on the Al Wahda Mall in November 2012 - Abu Dhabi's second store.
As well as being an all-rounded entertainment retailer, these Megastores also act as venues, with artist signings/appearances, performances and quiz nights and a newly launched boutique section offering everything from movie memorabilia to jewellery.
This store is quite popular among locals and expats in the country, as this is the only store where they sell more music than most stores in the country, which also explains why the country has more branches than the other Gulf countries.
In 1992, the Virgin Group and Blockbuster entered into a joint venture to set up the first Virgin Megastore on Sunset Strip in Los Angeles, which was closed in 2008. At its peak, there were 23 Megastores in the U.S. which generated $310 million annually. The U.S. stores were purchased by Related Companies and Vornado Realty Trust in 2007.
Under new ownership, eleven stores were gradually closed in 2007. On 2 March 2009, it was announced that all Virgin Megastores in the United States would close.
The store at Arden Fair Mall in Sacramento, Ca. closed in 2005 and was converted to an Urban Outfitters, while the Grapevine Mills location was closed at the end of 2008. Related Companies announced that the Virgin Megastore flagship store in Times Square would close by April 2009, with the space being replaced by Forever 21. On 25 February 2009 it was announced that the stores in San Francisco and Union Square (New York) would close in April and May, respectively, and the announcement of all stores closing followed soon thereafter. As of September 2012, the last remaining Virgin Books & Music outlet operates in Terminal 3 at John F. Kennedy International Airport.
Most locations included an in-store radio station, branded Virgin Radio. U.S. Virgin Radio was not a broadcast radio station, but a DJ operated hard-lines system which broadcast throughout the store, and the complex in which the store was located. At the Times Square location, DJ selections were heard on the retail floor, in the office areas, processing areas, and even out on the shop's Broadway sidewalk frontage.
All employees of the U.S. Virgin Megastores could be identified by their trademark red or black 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.
The Virgin Megastore chain in the U.S. 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 stores, updating each shop's product inventory every 24 to 48 hours. The GSA was reportedly accessible from the internet.
American Virgin Megastores 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 accordingly. The U.S. stores shared their experience with the real-time warehouse and the UK stores also used similar process.
Virgin Megastore (U.S.) 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 U.S. stores.
Virgin Megastores U.S. website is VirginMega.com. In 2002 this website became co-branded with Amazon.com, 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 & Taylor. On 31 May 2009 VirginMega.com ceased operating.
The first and only Virgin Megastore in Canada opened in December 1996 at 750 Burrard Street, at the corner of Robson Street and Burrard Street in Vancouver, British Columbia. The 40,000-square-foot (3,700 m2), 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 Library. The Virgin Megastore ceased its operations in Vancouver on 4 September 2005 when on 28 June 2005, HMV announced it was planning to expand the store and rebrand the location into the HMV brand. The acquisition took effect immediately after the closure and on 5 September 2005, HMV was opened. With the dominance of HMV in Canada, Virgin thus decided to exit the Canadian market entirely.
There were also plans to build its second Canadian store at Metropolis (later Toronto Life Square, now 10 Dundas East) in Downtown Toronto, just south of the since-closed Sam the Record Man flagship store as well as HMV's existing Toronto flagship. However, the exit from Canada resulted in the cancellation of these plans. An Adidas Performance store stands where Virgin would have.
In 1992, the Virgin Group and Blockbuster Inc. entered into a joint venture to set up Australia's first Virgin Megastores in Sydney, Melbourne and Adelaide. This lasted until Virgin sold their interest in the six stores to Blockbuster, who promptly rebranded them in 1993 to Blockbuster Music.
In October 2001, Brazin Limited (owner of Australia's largest entertainment retailer, Sanity) reintroduced Virgin Megastores in the country via two related transactions with the Virgin Group, acquiring 77 troubled Our Price music stores in the UK for a symbolic £2, and inturn gaining exclusive license rights in Australia for Virgin Entertainment, initially setting up the first Virgin Megastore on Chapel Street's, The Jam Factory in April 2002. Brazin also intended to use the Virgin brand to open 45 new Megastores in addition to converting 55 of its existing small-scale IN2 Music stores that had not already been rebranded as Sanity. Yet, the programme stalled as Brazin battled internal disruptions and struggled to separate the target-markets for Virgin and its chain of more than 200 Sanity stores (at the time). As a result, the company's entertainment division posted a $27 million loss in financial year, 2002–03, and by mid-2004, Brazin had only managed to open 12 Virgin Megastores.
In September 2003, Brazin sold out of its 118-store Sanity UK (former Our Price and VShop outlets) store network to Primemist Limited. In July 2004, Brazin entered into an agreement with Coles Myer to open 62 Virgin concept stores within the Myer department store chain. Brazin agreed to buy all of Myer's remaining CD and DVD stock, recruit, train and pay their own staff, and work within Myer's systems and promotions. These concept stores were marketed separately to stand-alone Virgin Megastores (due to their more limited stock availability) and branded, Virgin at Myer. This solved Brazin's problem since 2002 by separating the Virgin and Sanity target markets by making Virgin more "family orientated" while leaving Sanity's "street edge" to continue. Exactly a year later, Brazin stated that after a rocky start (with staff recruitment issues and aligning products with the typical Myer customer), Virgin at Myer was up 45 per cent on comparative sales and was performing well.
In December 2004, HDS Retail Asia Pacific opened Australia's first Virgin Books and Music travel outlet at Melbourne Airport. Since then, the company – now known as LS Travel Retail – opened another five Virgin outlets at other major capital city airports in addition to one railway outlet at Southern Cross Station in Melbourne. Yet, by early 2012, all of these stores have been closed.
By mid-2010, Sanity Entertainment (formally Brazin Limited) closed all Virgin Megastores. Also, in August of that year, all Virgin at Myer concept stores stopped operating under the Virgin brand due to Sanity Entertainment not renewing their contract with Myer Holdings (formally Coles Myer) and were either closed or converted back into a basic audio/visual department operated by Myer (in 2011, these non-branded audio/visual departments were later closed by Myer anyway). Sanity elected to exit the Virgin brand despite the licensing deal running until 2015.
Virgin Entertainment's Australian peak was reached in 2006 with 24 Virgin Megastores, 62 Virgin at Myer outlets, and 2 Virgin Books and Music stores in operation. As of September 2012, Australia contains no more Virgin Entertainment outlets.
In 1990 Virgin Megastores Japan Limited was started as a 50/50 venture between Marui and the Virgin Entertainment Group. In September 1990, the 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.
In November 2007, HDS Retail Asia Pacific (now known as LS Travel Retail) opened China's first and only Virgin Books and Music travel outlet at Hongqiao International Airport in Shanghai. As of June 2012, it is still in operation.
Virgin Books and Music
Virgin Books and Music is a Virgin-branded entertainment retail chain exclusive to airports and travel locations, operated by the Lagardère Services division of the French conglomerate Lagardère Group. Such stores have a much smaller size than Virgin Megastores and currently operate in 10 countries: Canada, China, Germany, Kuwait, Lebanon, Morocco, Poland, Spain, the United Kingdom and the United States.
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