Monday, 17 September 2007

Virgin to sell Megastores

Sir Richard Branson, the Virgin group founder is understood to be in talks to sell its Megastores music retail chain to a buyout team led by the group's managing director Simon Douglas and finance boss Steve Peckham.

Sir Richard founded Virgin as a mail-order record business in 1970 and opened his first retail outlet on London's Oxford Street the following year. Eight years later, the group literally moved down the street after acquiring the massive store that remains Virgin Megastores's flagship site. It is not clear how much the 130-store chain is worth and it is believed there are further talks on Sir Richard being paid following a sale if the business's performance improves. The chain has been braking even the last couple of months.

In the past four years, many of the UK's high street chains have failed as a result of supermarkets selling DVD’s, CD’s etc so much cheaper. Andy's Records, MVC, Tower Records, Music Zone and Fopp have all gone into administration and last month they were followed by ChoicesUK after it could not find a buyer.

The sector now only boasts HMV and Virgin Megastores as national chains. The pair recently held talks about a joint venture. Those negotiations broke down over price. (source: Telegraph)

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