We were crossing our fingers last week for Virgin after we reported the company's announcement to shut down its Union Square and San Francisco stores. But it looks like all of our hopes and wishes for the record and media company did no good, as the Virgin Entertainment Group Inc. has just announced the closure of its remaining six U.S. Virgin Megastore locations.
As previously reported, a joint ventured with two U.S. real estate companies in 2007 was the original catalyst for the shut down of the Virgin Locations. The real estate companies saw the profit of the retail stores' locations more valuable than the revenue the company was taking in -- in turn shutting down locations to gain higher profits from other renters.
"Our six best stores from a retail point of view are also our six best stores from a real estate point of view," said Simon Wright, chief executive of Virgin Entertainment Group Inc.
Of course the economic recession has also played its role in ending Virgin's reign as record store king, as well. The company had no plans for expansion, and according to Variety, when the company announced its closure of the Times Square store, the company could no longer bolster profit to support the rest of the chain.
Virgin opened its retail locations back in 1992, finding great success but, record sales have also declined over the past few years due to online music sharing, and companies like iTunes and Rhapsody, which has caused the physical sale of product from the Virgin stores to decrease since its height in 2002. With such factors playing against the company, its no wonder why they will be spinning Semisonic's "Closing Time" in their DJ booths this spring when the rest of the locations close.
Virgin still have approximately 150 stores throughout the rest of the world, which will not be affected by the shut down of the U.S. locations. The Virgin online store seems to be standing on its own two feet as well, and has not been subject to closure like the retail locations, so don't worry -- that snazzy Guns n' Roses t-shirt you always wanted but were too embarrassed to buy in person can still be found on Virgin's website, so maybe this will all work out in the long run.