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Tuesday, March 10, 2009

Virgin To Close Last 6 Stores

The last 6 Virgin Megastores in the United States will close later this summer, which is another blow to the already depleted ranks of the dwindling ranks of US music retailers.

The 6 stores, located in Hollywood, San Francisco, Denver, Orlando, and in New York's Time Square and Union Square, were actually doing OK even in this economy, taking in about $170 million last year.

The irony is the reason the stores are closing is that the real estate the stores are on has become more valuable than the income they produce. According to Simon Wright, chief executive of Virgin Entertainment Group, "Our six best stores from a retail point of view are also our six best stores from a real estate point of view."

But the real message here is that Virgin clearly sees no future selling recorded music. Even in this horrible real estate market, it's better to get out while you can.

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