VIRGIN MEGASTORES

(Redirected from Virgin Megastore)

'Virgin Megastores' is an international chain of record stores, founded by Sir Richard Branson on London's Oxford Street in 1971. In 1979 the company opened their first Megastore at the end of Oxford Street and Tottenham Court Road. There are now over 120 stores throughout the UK (including Virgin xs and Virgin Xpress) and many more stores around the world, with an online store and a digital download service. In 2001 the Virgin Megastores worldwide were split between the Virgin Group and the Lagardere Group.The Virgin Group owns the UK, Ireland, USA and Japan stores while The Lagardere Group owns the stores in France, United Arab Emirates, Qatar, Greece, Egypt and Lebanon. In August 2007 Virgin Megastores North America was acquired by Related Companies.[1]

Contents

Store experience

Product range

Customer service

In-store audio

Competition

Virgin XS

Technology

Locations

External links

Store experience

Product range

Virgin stores have a wide selection of CDs, games, books, DVDs, vinyl records, MP3 players, magazines, accessories, pornography and additional products such as calendars, board games, and Virgin branded items. Note that not all of these products (e.g. vinyl and pornography) are carried by all Virgin stores, though the larger UK and US stores do stock the full product range. Virgin Mobile products can also be found in separately run Virgin Mobile Concessions within most Virgin Megastores. Some stores also house cafes/coffee shops run by external companies.

Customer service

All employees of the U.S. Virgin Megastores can be identified by their trademark red t-shirts which have the Virgin logo on the front and the word STAFF on the back, as well as required lanyards with their first name printed on them.
Employees of Virgin Megastores and Virgin XS/Xpress in the UK and EIRE wear Virgin branded black T-Shirts with "Need Help? Just Ask" written on the front and "The V Team" on the back. Senior members of staff wear a MOD (Manager On Duty) lanyard. Only the Assistant Manager and Store Manager wear name badges, also stating their position.

In-store audio

Most stores include an in-store radio station. In the USA these are branded Virgin Radio, although are not related to Virgin Radio in the UK. In the UK, Virgin Music Radio (VMR) has ceased to broadcast from its home in the Oxford Street Megastore to the rest of the estate and now stores are required to play CDs from stock over their own instore stereo systems.
U.S. Virgin Radio is not a broadcast radio station, however, DJ operated hard-lines system which broadcasts throughout the store, and the complex in which the store is located. For example: in the Times Square store, not only can the DJ's selections be heard from the retail floor, but also in the office areas, processing areas, and even out on the store's Broadway sidewalk.

Competition

As more and more high street stores venture into the media sales market keeping up with competition is proving to be a hard fought battle for the UK Megastores. Big name supermarket chains in particular have adopted stocking popular music and DVD titles at increasingly low prices. For example the DVD ''Wedding Crashers'', released 28 December 2005 retailed at Tesco for £15.97 compared to a Virgin price of £19.99. The popularity of Video games has also seen cheaper competition keeping the customers away from the Megastores. A report published in August 2005 stated that Virgin Megastores have lost £260m in the past two years, according to accounts recently filed with Companies House, and remains solvent only with the help of hefty loans from other companies in Sir Richard's empire (Branson is passionate about his music shops, as it was the foundation he built his business on). The retail chain has borrowed £287m from related companies in the Virgin group, a debt that grew by £117m in the financial year to March 2004. Chairman John Jackson, a long-standing Branson lieutenant, said that since then the retailer has borrowed more from the parent company. However Virgin Megastores plans to break even in the 2006-2007 financial year. "A lot of hard work has been done to get the business into good shape," he said. Jackson said the first 18 weeks of this financial year had shown like-for-like sales similar to the year before, which was better than in the overall entertainment market.
The lenders in Sir Richard's empire are charging the retail chain an interest rate of 14% on the debt. A Virgin Group source said the company charges the rates that a venture capital firm would expect as a return.

The accounts stated that the music and video retailing business was still a "going concern" because the parent company had formally said it would provide enough funding for it to trade for at least 12 months. According to the accounts filed in Companies House, the Virgin Megastores group made an operating loss of £112m in the 14 months to the end of March 2004 due to escalating costs at the retail chain and the cost of re-organisation. A contributing factor was the inclusion in the accounts of the loss-making smaller stores, which were closed last year. Jackson said this should also lead to a loss for the next financial year. The year before, the operating loss had been £146m due to a writedown of the Our Price chain, which was bought from WH Smith in the late 1990s but struggled and was turned into V Shops in 2001. Turnover increased in the 14 months to the end of March, compared with the 12-month period previously, because the smaller stores were included.
"During the year, the group encountered a difficult trading environment with significant price competition being experienced, in particular from supermarkets, that affected sales and margins," the company said in a review of the business in its accounts.
It said this prompted a "strategic review", which led to a £31m charge to cover leases and other restructuring costs. Despite massive amounts of money being spent on re-fits over the last few years and more focus being spend on their bigger stores the company as a whole struggles to break even. No profit being made during the period 2002 - 2006. This is a hard blow to the company who blame downloading and illegal copying as some of the major factors affecting their lack of sales. Sales in HMV Europe however, Virgin's biggest competitor for the full year ended April 2005 grew to £986.0 million and operating profit was £96.8 million.
In recognition of the increased choice the customer is now offered when it comes to purchasing media, the Virgin chain has employed several strategies to secure customer loyalty as well as focus on higher standards of customer service. The 'Addict card' introduced in 2005 was brought in offering customers a stamp for every £10 spent in store. The idea being that once the customer has collected 10 stamps, they are awarded with a discount of £10 off their next purchase. Also introduced was the 'Mega-sharp' approach to customer service - a feature which is now integral to the 'Virgin Megastores Experience'. Staff are encouraged to ensure customers found everything they were looking for each and every time a customer walks through the door.
The ongoing discounted sales within stores remain competitive with top CD/DVD/Games titles retailing for competitive prices.
Competition against independent retailers mainly in the music sector doesn't pose a major threat for big companies such as the Megastores, however customers with a specialist taste usually find the independent stores more appealing offering more of a variety of 'hard to find' and 'rarer' titles.
Virgin also has an online service - www.virginmegastores.co.uk - which stocks the same entertainment product that can be found in the high street store, and has 48hr delivery guarantee and gift wrapping.
This same service is used in store for those customers who's item is currently out of stock. The system is called 'web enabled store' (WES) and guarantees the customer the item within 48 hrs and home delivery.
In 2005, Virgin Digital was launched to cater for those that bought their music digitally or wanted to rip and burn their current music collection. This is designed to add to the services provided by Virgin, rather than replace the Megastores. The download service has faced some criticism from consumer groups due to its in-compatibility with the highly popular iTunes program.
But saying all this HMV has had longer established download and internet retail services along with home delivery, competitive prices, digital hardware sales, two merged book chains (Waterstones and Ottakars), Larger back-catalogue and have more stores in the UK and Ireland than Virgin do.

Virgin XS

'Virgin XS' is the clearance arm of Virgin Megastores. There are approximately 17 Virgin XS stores and they are generally located in small units within outlet centres throughout the UK. Virgin XS stores stock the same charts as normal Virgin Megastores but they also sell through all Virgin Megastores sleeveless stock (Stock without their original packaging) at reduced prices as well as having various multibuy offers on back catalogue stock.
The chain was originally part of the Sound and Media Group(which itself was part of the Virgin Group).
It was set up by Peter Collins, Phil Worsfold, Christian Michaels and Chris Tuft.

Technology

The computer system at the heart of the UK Virgin Megastores is ''ELVIS'' (EPOS Linked Virgin Information System) which was designed for Virgin in 1991. ELVIS collects data from store's point-of-sale terminals for stock and sales reporting; provides instant information for customers on all the store's product lines, holds play list information for Virgin Megastore Radio (accessible by all stores simultaneously); and allows for electronic re-ordering from suppliers. As of September 2006 ELVIS was updated to utilise RealTime Polling. This means that now all inventory updates every 15 minutes, giving an accurate representation of on hand stockholding as well as being a useful tool for producing Best-Seller reports.
While the UK Stores use the ELVIS system, the Virgin Megastore chain in the United States has an entirely different GSA look-up system. This is a private network that links to all of the North American stores, and updates each store's product inventory every 24 to 48 hours. The GSA is accessible from the internet if one can obtain the exact internet address.
Virgin Megastore (US) implemented a near real time data warehouse in 2004. The data warehouse is called Crescendo and collects POS transactions, along with customer traffic counts and generates KPI reports in near real time. The near real time information helped the managers identify trends quicker and react. The US stores shared their experience with the real time warehouse and UK now does a similar process.
Named after the computer in the Stanley Kubrick film, '', HAL is the name of the inventory replenishment system used throughout the American chain of Virgin Megastores. It got its name from many of the Virgin Staff who were tired of the way the program works.
Virgin Megastore (US) have implemented a new Customer Loyalty Program - Virgin V.I.P. The new Program uses the read/write GraphiCard. Every time a member purchase is made, the Graphicard is swiped through the POS Graphicard Terminal. Members points are instantly updated on the face of the card.

Locations

Main articles: Virgin Megastores store locations

External links

★ Virgin Megastores Australia

★ Virgin Megastores France

★ Virgin Megastores Greece

★ Virgin Megastores Japan

★ Virgin Megastores UK

★ Virgin Megastores US

★ Virgin Megastore Gulf countries and Egypt