Virgin Megastores in France to declare insolvency
Landmark store on Champs Elysees story will go as French group seeks last-ditch strategy change
THE CHAIN of 25 Virgin Megastores across France is to declare insolvency on Monday, a management spokesman has confirmed to AFP. Among the casualties will be its renowned flagship store on the Champs Elysees. Talks are already in progress to terminate the lease.
Virgin in France is controlled by the investment group Butler Capital Partners. It has had no connection to the British Virgin group since 2001 when French media company Lagardere bought Virgin France.
Virgin has been struggling for four years, according to Le Parisien, accumulating debts of E22 million. Currently it is behind on paying bills and taxes.
The big problem has been maintaining CD and DVD sales in the face of increasing digital downloads. It is also up against the formidable and popular French chain FNAC.
About 1,000 staff are employed at Virgin Megastores across France. They will be told at a "town hall meeting" on Monday about the company’s decision and what it means.
Le Parisien believes the insolvency move is designed to give the company a chance to change tactics and open much smaller stores to replace its megastores. But the likelihood, says the paper, is that insolvency heralds "pure and simple" liquidation.