Richard Branson on Monday sold his Virgin Megastores record shops in Britain and Ireland, shedding the brand which launched his Virgin empire.
The British tycoon said high street music retailing was facing a stiff challenge from supermarket and online sales.Virgin Group sold Virgin Megastores in Britain and Ireland for an undisclosed sum to a management buy-out team.
The deal creates Britain and Ireland's largest independent entertainment retailer and the 125 stores will now be rebranded as Zavvi after Zavvi Entertainment Group.
And so it goes. Richard Branson being who he is, I'm not surprised that he found a buyer for the UK Virgin Megastores, as opposed to holding out for so long that shuttering the operation became the only option.
The really telling quote is here:
He said Virgin Group had chosen to move away from retailing into licensing music."There's no question that with online sales and cheap supermarket prices that music retailing has become a different business than it was 30 years ago when I started," he said.
...
In the last six years we have been withdrawing from entertainment retailing which is no longer viewed as core to the group's future. We now choose to franchise our global entertainment retail operations, rather than own them."
However, not everybody holds a dim outlook for music retailing. For example, there's the people who bought Virgin Megastores from Branson:
Simon Douglas, managing director for the new company, said: "Despite escalating competition, there is still very much a place on an increasingly homogenised high street for an independent entertainment specialist
that puts customers, product, service and personality at the top of the agenda."
While not everything that Richard Branson has touched has turned to gold (and really, it would be unrealistic to expect that), he's right a lot of the time, so I think that I'm inclined to side with his perspective on the state of music retail.
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2 comments:
The downtown Chicago flagship store closed up a while back.
Pity...
I agree that the "smart money" is probably going to side with Mr. Branson, even as I truly laud the values espoused by Mr. Douglas. May Zavvi be able to afford to maintain those values in a marketplace that has largely abandoned them. And may the customers support Zavvi rather than accept being in an abusive relationship with their retailers in order to get the lowest price.
Also, I really hope the new company is "Zavvi" enough to pull this all off.
*Sorry Lee. I couldn't resist it and I was surprised that you did!*
Shalom
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