Virgin Megastores Announce Spectacular Growth in Q1

Virgin Megastores Celebrates Strong Start to 2007 With Opening of New Store, New Website and Growing Loyalty Program

 

 LOS ANGELES, CA, 2nd August 2007

Fresh from a successful fiscal year in 2006, Virgin Megastores continues the momentum into the new financial year with the announcement today that the chain's sales are continuing to rise strongly. Despite the current industry trend where music sales have seen a 15% drop, Virgin Megastores in the U.S. have seen a 9% spike in comparable music sales in the first quarter, and a 15% increase in overall comp sales from this time last year. Virgin Megastores have seen significant sale increases in several other departments, including an 11% increase in DVD sales and an 18% spike in interactive games' sales. Virgin Megastore executives are confident the sales success can be attributed to strong marketing campaigns and the recent investment in the diversification strategy which has made the Megastores an entertainment lifestyle store, rather than solely a music retailer. The sales increases have been accompanied by a significant increase in profitability in Q1 against last year.

"A few years ago we saw a need in the retail market for customers to be able to shop at one location for the latest in DVDs, games, personal electronics, fashion and music. We worked hard to implement the best products in these categories and have created a lifestyle entertainment shopping destination," explains Simon Wright, CEO, Virgin Entertainment Group International. "We will continue to bring in products that we see a strong need for as we are confident that this diversification strategy has been the key to our success."

The first quarter brought a major benchmark for Virgin. The New York Times Square Virgin Megastore has achieved annual sales of $50 million dollars for the first time making it the highest volume store of its kind in the World; this brings the Company close to its sales target of $100 million total turnover for Manhattan.

Along with over $6 million dollars in refurbishments on several of the chain's key locations, Virgin also recently opened retail space inside one of California's most famous concert venues, the Hollywood Bowl. The space recently vacated by Tower Records was the perfect location for the Virgin chain. This past June Virgin Megastore/Hollywood Bowl opened a mini-version of the brand's famous retail outlet inside the legendary amphitheatre, offering concert goers a selection in the latest CDs and DVDs. Further to this investment Virgin Megastores are considering investing in an exciting and original pop-up retail plan to open up other markets in its key Californian and New York territories.

Virgin has also reached some other significant benchmarks in the last quarter. The brand's V.I.P. Loyalty Program, launched just nine months ago in just seven store locations, have already signed up 150,000 members. The V.I.P. program is a first of its kind in North America and offers its members special privileges such as: trips, backstage concert passes, celebrity meet and greets, and deep discounts on selected store products.

Executives are excited about other changes this fall. "This fall we will be launching a new website at virginmega.com that will offer our customers a full catalog in music, DVD and game products as well as fashion and accessories," explains Dee Mc Laughlin, VP of Marketing, Virgin Entertainment Group, North America. "Our customers will once again be able to shop in our stores and online for the latest and hottest in entertainment products."

Along with the new website Virgin will also launch a Social Media Newsroom (SMN) online which will offer video, podcasting, and up to the minute news content for both consumers and the media. The SMN will be a one-stop site where both press and consumers can find out the latest Virgin news, gossip, daily blogs, photos and in-store events. The site will launch in early fall.

ABOUT VIRGIN ENTERTAINMENT GROUP

Virgin Entertainment Group is the world's leading multi-channel music and entertainment retailer, providing customers with a range of superior entertainment experiences through a family of integrated Virgin-branded businesses. The "category killer" Virgin Megastores and Virgin Megastore Online at www.virginmega.com are integral parts of a strategy to provide entertainment customers with what they want, how they want it, and when they want it. For more information, or to check out the location of the nearest Virgin retail, go to www.virginmegamagazine.com

Virgin Megastores article