NEW YORK, (CelebrityAccess MediaWire) — Related Companies today announced the acquisition of Virgin Megastores North America. Virgin Megastores North America currently operates eleven stores nationally across 400,000 sq. ft. of retail space. The sale is expected to close in September of 2007.
Related Companies President Jeff T. Blau said, "The acquisition of Virgin Megastores North America is a tremendous opportunity for Related to provide strategic value and exemplifies Related's investment strategy. Virgin Megastores is a well-managed premier retail brand of top-tier entertainment lifestyle stores. Their evidenced commitment to progressive business strategies and service makes them an ideal partner. We look forward to leveraging the resources and synergies between our two great brands."
Sir Richard Branson, founder and chairman of the Virgin Group said, "Virgin Megastores in the U.S. has enjoyed a brilliant two decades as a music and lifestyle retailer, and I am so proud of what we've been able to offer consumers. With most of our global retail operations now franchised, Virgin Group will continue to focus on being a global leader in transportation and renewable energy, with interests in financial services, communications and media, health, and leisure."
Simon Wright, CEO, Virgin Entertainment Group said, "We'd been looking for a strong investment firm to work with to continue the successful repositioning achieved by Virgin Megastores USA. Related has a strong track record of investment and shares Virgin's values. Consistent with Virgin Group's approach taken with partners elsewhere across the globe, we found an ideal partner in Related, one with an outstanding reputation and a shared belief in creating value to the consumer experience at Megastores."
Continuing employment contracts have been put into place with senior management and Related expects to continue to make key investments into the company, its assets and its future. Virgin Megastores has experienced continued growth in 2007 with a 10% increase in comparable music sales through fourth period, and a 17% increase in overall comp sales over last year. Virgin Megastores have also seen significant sale increases in several other departments including an 11% increase in DVD sales and a 26% increase in interactive games' sales, together with an average increase of 30% in fashion and electronics. The corporate acquisition is another example of Related's value added investment strategy. In 2006 Related acquired Equinox Holding Inc., the premier operator of upscale fitness clubs and spas in New York, Chicago, Los Angeles, San Francisco and South Florida. That same year, Related Companies was part of an investor group that brought leading international developer and operator of destination resorts, casinos and luxury hotels Kerzner International Limited private.
