Virgin Megastores

Virgin Megastores

Infobox Company
name = Virgin Megastores

type = Private
genre =
foundation = Oxford Street, London (1971)
founder = Sir Richard Branson
location_city = London
location_country = England, UK
location =
locations =
area_served = Worldwide
key_people =
industry = Retail
products = Books
services =
market c

revenue =
operating_income =
net_income =
assets =
equity =
owner =
num_employees =
parent = Virgin Group (Japan)
Related Companies (USA)
Lagardère Group (International)
divisions =
subsid =
homepage = [ Virgin Megastores International portal]
[ Virgin Megastores US]
footnotes =
intl =

Virgin Megastores is an international chain of record shops, founded by Sir Richard Branson on London's Oxford Street in January or February 1971 (exact date uncertain)cite web|url= |title=About Us |publisher=Virgin Mega |accessdate=2008-05-26] . Virgin Megastores are best described today as entertainment retailers.

In 1979 the company opened their first Megastore at the end of Oxford Street and Tottenham Court Road [cite web|url= |title=Who's Richard Branson |publisher=Virgin Group |accessdate=2008-04-11] .


Like many of Branson's Virgin brands, Virgin Megastores is not wholly owned by the Virgin 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, Egypt and Lebanon [cite web|url= |title=Lagardère Media acquires Virgin Stores in France |publisher=Lagardère Group |date=2001-07-26 |accessdate=2008-04-11] .

Virgin Megastores in the Middle East currently trades as V Star Multimedia LLC [cite web|url= |title=Privacy Policy |publisher=VMegaNews |accessdate=2008-05-27] .

In August 2007 the real estate company Related Companies announced their intention to acquire the majority controlling interest of Virgin Megastores North America. [cite web|url= |title=Related Companies to Acquire Virgin Entertainment Group Virgin Megastores North America |publisher=PR Newswire |date=2007-08-17 |accessdate=2008-03-28] [cite web|url= |title=Related Companies to Acquire Virgin Entertainment Group Virgin Megastores North America |publisher=Related |date=2007-08-17 |accessdate=2008-04-11]

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 [cite web|url= |title=Branson sells Virgin music stores |publisher=BBC News |date=2007-09-17 |accessdate=2008-03-28] .

Store experience

Product range

Virgin shops have a wide selection of CDs, games, books, DVDs, vinyl records, MP3 players, magazines, accessories and additional products such as calendars, board games, and Virgin 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 [cite web|url= |title=Virgin Entertainment Group Launches Ben Sherman Boutiques Inside Select Virgin Megastores |publisher=Access My Library |date=2003-02-12 |accessdate=2008-05-26] . 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 [cite web|url= |title=Virgin Mobile to set up outlets in Megastores |publisher=Access My Library |date=2003-08-04 |accessdate=2008-05-26] [cite web|url= |title=Virgin Mobile USA is Virgin Megastores' One and Only |publisher=Access My Library |date=2002-06-20 |accessdate=2008-05-26] . Some shops also house cafes/coffee shops run by external companies [cite web|url= |title=SSP wins contract for French Virgin Megastores |publisher=CatererSearch |date=2001-07-26 |accessdate=2008-05-26] .


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 [cite web|url= |title=Virgin Digital sets US, UK debut dates |publisher=Register |date=2004-06-23 |accessdate=2008-05-26] . The download service has faced some criticism from consumer groups due to its in-compatibility with the highly popular iTunes program. The service has since been discontinued [cite web|url= |title=Q&A: Virgin's digital shutdown |publisher=BBC News |date=2007-09-28 |accessdate=2008-05-26] .



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There are 36 Virgin Megastores in France. In March 2008 the French Megastores enlisted Kyriba Corporation's real-time, on-demand cash and treasury management solution [cite web |url=,_Superior_Energy,_Virgin_Megastore,_Arianespace_and_Boiron_Labs_select_Kyriba_for_their_Treasury_Management_Solution.html |title=Qualcomm, Superior Energy, Virgin Megastore, Arianespace and Boiron Labs select Kyriba for their Treasury Management Solution |publisher=Bob's Guide |date=2008-03-11 |accessdate=2008-03-29] .


Virgin Megastore withdrew from the German market in 1994, amid complaints that the country's shop-closing law was too restrictive [cite web |url= |title=Virgin Learns You Can't Always Get What You Want |publisher=International Herald Tribune |date=1995-09-11 |accessdate=2008-05-26] . However, Virgin returned to Germany with a new store (not a "Megastore") that opened in the Berlin Hauptbahnhof central station in Berlin in May 2006.

UK / Ireland

Virgin Megastores was started in the United Kingdom in the 1970s. In 2007 the Virgin Group was looking to sell the UK and Ireland stores. On 17 September 2007, it was announced that only the UK arm of the Virgin Megastores brand is to break away from the Virgin Group. A


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 Eiré 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. Zavvi employees are identified by their Zavvi branded black T-Shirts with a Zavvi logo on the front and "staff" on the back.


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,, [cite web |url= |title=Virgin Megastores launch new transactional website |publisher=Access Library |accessdate=2008-05-26] 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 was the clearance arm of Virgin Megastores. There were approximately 17 Virgin XS shops and they were generally located in small units within 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 [cite web |url= |title=Branson lets go of record store chain |publisher=Financial Times |date=2007-09-16 |accessdate=2008-04-05] .

Middle East

The owners of Virgin Megastores in the middle east is V-Star Multimedia. There are currently stores open in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Qatar and the UAE. There are plans to open more stores in Omancite web |url= |title=Mega makeover in store for Virgin |publisher=Business 24-7 |date=2008-05-24 |accessdate=2008-05-27] [cite web |url= |title=Mega makeover in store for Virgin |publisher=VMegaNews |accessdate=2008-05-27] .


As of September 2008, there is currently one Virgin Megastore in Bahrain. It is in the Bahrain City Centre.


As of June 2008, there are two Virgin Megastores in Egypt. One is located in the City Stars (Cairo) Shopping Mallcite web |url= |title=Store Locations |publisher=VMegaNews |accessdate=2008-05-27] and the other is in Sharm el-Sheikh.


As of May, 2008 there are two Virgin Megastores in Kuwait. One in the Marina World Shopping Mall, Salmiya and a second in Kuwait International Airport.


Virgin's main store in Lebanon is in the old Opera house on Martyrs' Square, Beirut Central District . There are also smaller stores at ABC Mall Achrafieh, CityMall Dora, in the northern city of Tripoli and a duty free shop at Beirut International Airport [cite web |url= |title=Virgin |publisher=What's Up Lebanon |accessdate=2008-07-27] .


Virgin Megastores currently has one store in Qatar, located in the Villagio Mall Italian themed mall, Doha which is the shopping centres main anchor. There are plans to open a second store in the future.

United Arab Emirates

The first Middle Eastern Virgin Megastores opened in the United Arab Emirates [cite web |url= |title=Company Profile |publisher=VMegaNews |accessdate=2008-05-27] . As of May 2008, there are five Virgin Megastores in the UAE. One is located in the Mercato Shopping Mall, a renaissance architecural style, a second in the BurJuman Shopping Mall, a third in The Mall of Emirates which is the biggest Virgin Megastore in the UAE. 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.


There is a Virgin Megastore in City Mall in Amman, which opened on 5 September 2007 [cite web |url= |title=Virgin Megastore Amman opens September 5th, 2007 | |date=2007-09-04 |accessdate=2008-07-07] .

North America


The first Virgin Megastore in the United States opened in 1992 on Sunset Strip in Los Angeles, and there are now 11 stores nationwide. The USA website,, also ships goods to Canada and the UK. The original 8000 Sunset Boulevard location at the end of the Sunset Strip has since been closed and is being converted to other stores [Cite web |url= |title=Virgin Megastore on Sunset Strip to close |publisher=Video Business |date=2007-12-27 |accessdate=2008-05-29] .

As of May 2008, Related Companies is exploring the possibility of selling their One Union Square, New York store in early 2009 [cite web |url= | title=Virgin may give it up next year at megastore location | publisher=The Villager |date=2008-05-21 |accessdate=2008-05-26] .


Most shops include an in-store radio station. In the USA these are branded Virgin Radio. USA Virgin Radio is not a broadcast radio station, however, DJ operated hard-lines system which broadcasts throughout the shop, and the complex in which the shop is located. For example: in the Times Square shop, not only can the DJ's selections be heard from the retail floor, but also in the office areas, processing areas, and even out on the shop's Broadway pavement.

All employees of the USA Virgin Megastores can be identified by their trademark red t-shirts which have 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 USA has a different GSA look-up system to other the international arms of the chain. This is a private network that links to all of the North American shops, and updates each shop's product inventory every 24 to 48 hours. The GSA is accessible from the internet if one can obtain the exact internet address.

Virgin Megastore (US) implemented a near real time data warehouse in 2004. The data warehouse is called Crescendo and 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 UK now does a similar process.

Named after the computer in the Stanley Kubrick film, "", HAL is the name of the inventory replenishment system used throughout the American chain of Virgin Megastores. It got its name from many of the Virgin staff who were tired of the way the program works. Fact|date=February 2007

Virgin Megastore (US) have implemented a new Customer Loyalty Program - Virgin V.I.P. The new Program uses the read/write GraphiCard. Every time a member purchase is made, the Graphicard is swiped through the POS Graphicard Terminal. Members points are instantly updated on the face of the card [cite web|url= |title=Virgin Megastores Continue Commitment to Music Retail by Unveiling New Customer Loyalty Program |publisher=PRNewswire |date=2006-10-11 |accessdate=2008-05-26] .


The first and only Virgin Megastore in Canada opened in December 1996 on the corner of Robson Street and Burrard Street in Vancouver, British Columbia. 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 Library. The Virgin Megastore ceased its operations in Vancouver on September 4, 2005 when on June 28, 2005, HMV announced it was planning to expand the store and rebrand the location into the HMV brand. The acquisition took effect immediately and on September 5, 2005, HMV was opened. [cite web |url= |title=HMV to open Canada’s largest dedicated music, DVD store |publisher=HMV Group |date=2005-06-28 |accessdate=2008-04-28] . However, due to the dominance of HMV in Canada, Virgin decided to exit the Canadian market entirely [cite web |url= |title=Virgin Closes Sole Canadian Store as HMV Expands |publisher=CIRPA |date=2005-07-25 |accessdate=2008-05-26] .

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 Adidas Performance store stands where Virgin would have [cite web |url= |title=After 12 years of delays and setbacks, Toronto Life Square prepares to open its doors |publisher=Daily Commercial News |date=2008-03-11 |accessdate=2008-06-20] .


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 Jackson, 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 Price 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 [cite web |url= | title=Virgin Megastores lose £260m in two years | publisher=The Guardian |date=2005-11-08 |accessdate=2008-04-11] .

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 [cite web |url= | title=Virgin Megastores launch national loyalty card scheme | publisher=Borkowski |date=2007-05-03 |accessdate=2008-04-11] . 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 [cite web |url= | title=Branson sells Virgin Megastores | publisher=The Guardian |date=2007-09-17 |accessdate=2008-04-11] .

See also

* Zavvi


External links

* [ Virgin Megastores International portal]
* [ Virgin Megastores France]
* [ Virgin Megastores Greece]
* [ Virgin Megastores Japan]
* [ Virgin Megastores US]
* [ Virgin Megastore Gulf countries and Egypt]
* [ Virgin Megastore Lebanon]

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