LOS ANGELES (CelebrityAccess MediaWire) — According to SoundScan the majority of music retail chains saw a 12% decline in music sales over the holiday season. However, Virgin Megastores celebrated the New Year by setting new records set by the brand. The North American chain of stores saw a 12% growth in retail sales over last year's holiday period. Virgin Megastores contributed some of the growth to having a strong market share on new releases as well as the largest selection of specially priced CDs. Virgin Megastores saw expansive sales spikes in several departments, including a 28% increase in electronic sales. The entire year of 2006 was a strong sales year for the Virgin Megastore chain, up 5% nationally since last year and up 10% in the New York City market since 2005.
"It's been a fantastic year for the Virgin Megastore brand, and it was the best holiday season we've seen in the past five years. Our music and game sales outperformed our expectations and those in the industry," explains Simon Wright, CEO, Virgin Entertainment Group, North America. "We focused on staying in stock in both new titles and deep catalog and we saw every genre from Jazz to Classic Rock increase in sales from the 2005 holiday period."
Virgin Megastores set out with an extensive refurbishment and product diversification strategy in several of the key stores a couple of years ago. The company attributed the success in 2006 to the brand's continued commitment to shift the Virgin Megastores into an entertainment lifestyle store offering larger DVD, electronic, games and apparel departments. The brand has spent over $1 million dollars in refurbishments on several of the chain's key locations.
"We set out a few years ago to create a 'store-within-a-store' concept, by creating shopping zones," explains Dee Mc Laughlin, senior marketing director, Virgin Entertainment Group, North America. "By expanding our DVD, gaming, electronics, apparel and music departments we are providing more choices in pop culture merchandise to customers. Our success is illustrating that the brand's move from the pure music model to a lifestyle store is working well."
Virgin Megastores has undergone tremendous changes to its retail operation in the past three years, including some under-performing store closures, some major refurbishments to the brand's more popular stores, such as the Times Square flagship as well as the San Francisco location and the grand opening of a new west coast flagship in the heart of Hollywood.
"We have seen the business profits improve with even more potential," explains Wright. "We have closed stores,but only where those stores were not profitable or could not be developed within the new strategy, and that was part of the plan we put into effect years ago. We are a fitter, leaner and financially stronger company as a result."
Virgin Megastores also expanded its advertising buys by dedicating 30% of the company's annual budget to holiday advertising, which was a dramatic increase from years past. For the first time Virgin Megastores used circulars in commuter print and tourist publications as well as focused on spreading the word to consumers about the brand's extended range of lifestyle products via national cable TV advertisements.
Moving forward, Virgin Megastores have plans to expand several of the companies programs including its newly founded V.I.P. customer loyalty program, the Virgin Mega College Tour which kicks off in April, and the ongoing relationship the chain has with Virgin Unite, the non-profit wing of the Virgin Group. –Bob Grossweiner and Jane Cohen
