Music retail takes a hit
Virgin Megastore in Times Square
After years of competing with online music downloads and months of struggling with the recession, the final six Virgin Megastores in the United States will shut their doors.
The chain of stores got its branding from billionaire Richard Branson, who participated in many of the splashy stunts that made the store famous.
Why close down?
Virgin Megastores in the U.S. are still profitable, despite the obstacles it faces. However, the real estate company that owns the chain of stores in the United States has determined that it can charge higher rent from different tenants. Thus, the last six remaining stores in America will be shut down before summer is over.
Battle with the Internet
People have been turning to the Internet more and more. People get their payday loans online, shop for retail items online and download music online. Trends in music are heading more and more toward single-song sales like the type you can buy on iTunes.
Staying afloat … for a while
Music sales have declined for seven of the last eight years. The Virgin Megastores have managed to stay profitable by expanding its merchandise. The gigantic retail stores sold clothes, books and electronics. At its peak, in 2002, the store had 23 U.S. locations.
The first Virgin Megastore opened in Hollywood in 1992. The chain was sold in a joint venture to Related Companies and Vornado Realty Trust in 2007.
The beginning of the end
The decision to close down the remaining stores closely followed the decision to shut down the chain’s most famous store: its flagship location in Times Square, New York City.
The 52,000-square-foot Times Square store will close in mid-April. Between the closing of the Times Square store and June, the rest of the locations will follow suit. First another New York store will shut down, and that will be followed by outlets in Los Angeles, San Francisco, Orlando and Denver. About 1,000 staff and 60 corporate workers will be laid off.
A past filled with pomp
The flagship store in Times Square will hold a one last hurrah, during the last week in March, before Virgin moves out. Virgin has been known to throw star-studded, dramatic parties.
At the store opening in Salt Lake City in 1992, parachutists descended from the sky. Branson was known for dressing up in outlandish costumes, such as the Mad Hatter of Boston and Axl Rose, for store openings. The glitzy stores often showcased album launches for artists including Mariah Carey, Clay Aiken, Faith Hill and Avril Lavigne.
A legacy
Simon Wright, the chief executive of Virgin Entertainment Group Inc., believes that the events the store held will be remembered more than its retail items.
“People can go online to buy music, but there won’t be any replacement for the events that we held,” Wright said. “Times Square was particularly famous for that.”
Still on the map
Virgin megastores will still exist, just not in the United States. There are still about 150 locations, including stores in France, Australia, Japan and the Middle East. All are owned by local companies with licensing agreements that lead back to Branson.
Oh, how the mighty have fallen. I remember being shocked when Tower Records finally closed, but now Virgin is going down the drain…the era of the album is over. Its too bad, because I actually still buy CDs, but I don’t think they’ll ever completely go away.