Page last updated at 13:17 GMT, Wednesday, 14 January 2009

Virgin's US flagship store shuts

Virgin Megastore in Times Square, New York
Virgin has been in Times Square for more than a decade

The biggest record shop in New York, the Virgin Megastore in Times Square, is to close in April.

The 75,000 sq ft store, which opened in 1996, is one of six currently operating under the Virgin name in the US.

However, its fate has been uncertain since Virgin boss Sir Richard Branson sold his North American entertainment arm in August 2007.

Virgin's other New York branch, in Union Square, is unaffected by the closure move.

Higher rent

According to US music trade magazine Billboard, the store is being closed because its current owners, property firms Related and Vornado, can lease the space more profitably to another tenant.

The two firms acquired the Virgin Entertainment Group North America in a joint venture 18 months ago.

Billboard quoted a Vornado executive as saying that Virgin paid just $54 per sq ft in rent for the location, whereas the market rent in the area was about $700.

Virgin has been the only major music chain in New York since 2006, when Tower Records went into liquidation. HMV pulled out of the US market in 2004.

Record shops of all kinds have been hard hit worldwide by declining sales of CDs and the rise of digital downloads.

However, the Virgin Times Square store makes an annual profit of $6m on sales of $55m, according to sources quoted by Billboard, making it the highest-volume music store in the US.

Virgin sell-off

Although the Virgin brand appears on storefronts around the world, none of them are now owned by Sir Richard Branson's Virgin Group.

Most of Virgin's music stores internationally are run by the French-based Lagardere Group, which acquired them in 2001.

In the UK, Virgin's shops were rebranded as Zavvi following a management buy-out in September 2007. The chain went into administration last month following the collapse of its main supplier, Entertainment UK.



Print Sponsor


MUSIC RETAILING

Promotional logo for Stuff Market Place Stuff happens
What comes next when record shops close down?

Beatles box set, USB edition Beatles boom
Why is troubled EMI still dependent upon old music?

Rare Turkish music album reissued by Finders Keepers Records Lost tunes
Rare music sleuths make a monkey of the major labels

White vinyl single coming off the presses at the Portalspace factory in Hayes, Middlesex Revived 45
The seven-inch vinyl single marks its 60th anniversary
MORE FEATURES
 
KEY NEWS STORIES

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2013 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific