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Virgin announced its plans to close two of its megastores–one in Chicago (pictured), and one in Salt Lake City–over the weekend, citing the two locations’ lack of profitability. At the same time, it announced that it would be opening a new, more modest store in California, and that it was scouting locations for more stores in California and New York:
According to VEG CEO Simon Wright, the Chicago store, which had an annual volume of $16 million, was never profitable due to high rent. In fact, the lease was to expire in 18 months and VEGNA probably would have been looking at even higher rent, so the chain was happy to jump at a chance to sell the lease to the Forever 21 clothing chain, Wright tells .biz.
Likewise, in Salt Lake City, the landlord exercised an option to terminate the current lease but would have allowed VEGNA to stay at a higher rent, which would have put the store into the red. So again, the chain decided to close.
Virgin’s new store is a more modest affair–3,000 square feet, as opposed to the Chicago location’s 50,000–and its location makes a lot more sense: It’s at the Hollywood Bowl, which attracts people interested in spending money on music. We always enjoyed the theme-park-ishness of Virgin’s stores, although since their splashy Stateside launch, some of the stores have become a little worse for wear (the downstairs area at the Union Square location in New York is a spaced-out mess); that the company is retrenching and looking for more “intimate” spaces is probably good for the chain’s overall health, if not so great for the possibility of unearthing that import-only Radiohead single that you’ve been looking for since it came out in 1998.
Virgin To Close Two Stores, Open One [Billboard.biz]
[Photo via Virgin Megamagazine]
Vegnaboys?
High rent? On North Michigan Avenue? Whoda thought?
The smartest thing the Virgin Megastore managers did was not including “Music” in the store’s title. Because with DVDs, iPod accessories, board games and T-shirts crowding out the CDs on the floor lately, the store’s going to be about as much about music within 10 years as MTV is now.
A new Hollywood Bowl store. Interesting. Any time I’ve been in the stores on Sunset and Hollywood, they are always empty. I don’t know how that place makes money.
I’m from SLC and I will miss our Virgin store. The employees were polite and knowledgable, and the experience of being in a record store is still a joy, at least to an old amphiuma like moi.