Virgin Megastores UK
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Virgin Megastores was a retail chain that operated in the United Kingdom from 1971 to 2007. The company was established by
Richard Branson Sir Richard Charles Nicholas Branson (born 18 July 1950) is a British billionaire, entrepreneur, and business magnate. In the 1970s he founded the Virgin Group, which today controls more than 400 companies in various fields. Branson expressed ...
, originally as a small record shop, and became a national chain. In 2007, the company was sold to management, and was rebranded as
Zavvi Zavvi is an online retailer of entertainment products, including Blu-rays, collectables, homeware and toys. Originally a physical retailer, the brand has been online only since it was bought from administration by The Hut Group in 2009. History ...
. Zavvi entered administration in 2008 and subsequently closed.


History


Branson's early business ventures

Richard Branson &
Nik Powell Nik Powell (4 November 1950 – 7 November 2019) was a British businessman and one of the co-founders of Virgin Records with Richard Branson. After operating a mail-order company, a small record shop, and a recording studio, the partners estab ...
had initially run a small record shop called ''Virgin Records and Tapes'' on
Notting Hill Gate Notting Hill Gate is one of the main thoroughfares of Notting Hill, in the Royal Borough of Kensington and Chelsea. Historically the street was a location for toll gates, from which it derives its modern name. Location At Ossington Street/Ke ...
, London, specialising particularly in "
krautrock Krautrock (also called , German for ) is a broad genre of experimental rock Experimental rock, also called avant-rock, is a subgenre of rock music that pushes the boundaries of common composition and performance technique or which experiments ...
" imports, and offering bean bags and free vegetarian food for the benefit of customers listening to the music on offer. After making the shop into a success, they turned their business into a fully fledged record label,
Virgin Records Virgin Records is a record label owned by Universal Music Group. It originally founded as a British independent record label in 1972 by entrepreneurs Richard Branson, Simon Draper, Nik Powell, and musician Tom Newman. It grew to be a worldwid ...
. The name Virgin, according to Branson (in his autobiography), arose from a colleague of his when they were brainstorming business ideas. She suggested Virgin – as they were all new to business – like "virgins". The first release on the label was the
progressive rock Progressive rock (shortened as prog rock or simply prog; sometimes conflated with art rock) is a broad genre of rock music that developed in the United Kingdom and United States through the mid- to late 1960s, peaking in the early 1970s. Init ...
album ''
Tubular Bells Tubular bells (also known as chimes) are musical instruments in the percussion family. Their sound resembles that of church bells, carillon, or a bell tower; the original tubular bells were made to duplicate the sound of church bells within a ...
'' by multi-instrumentalist
Mike Oldfield Mike may refer to: Animals * Mike (cat), cat and guardian of the British Museum * Mike the Headless Chicken, chicken that lived for 18 months after his head had been cut off * Mike (chimpanzee), a chimpanzee featured in several books and documen ...
in 1973.


First store

Having set up a mail order business from Richard Branson's bedroom, Virgin's first formal store opened on Liverpool's
Bold Street Bold Street is a street in Liverpool, England. It is known for its cafés and for the Church of St Luke, Liverpool, Church of St Luke, which is situated at the top end. The bottom end leads into the area surrounding Clayton Square, which is par ...
in January or February 1971 (exact date uncertain) This was followed by a store in London's
Oxford Street Oxford Street is a major road in the City of Westminster in the West End of London, running from Tottenham Court Road to Marble Arch via Oxford Circus. It is Europe's busiest shopping street, with around half a million daily visitors, and as ...
.. In 1979 the company opened their first Megastore at 14-16 Oxford Street (at the intersection of
Oxford Street Oxford Street is a major road in the City of Westminster in the West End of London, running from Tottenham Court Road to Marble Arch via Oxford Circus. It is Europe's busiest shopping street, with around half a million daily visitors, and as ...
and
Tottenham Court Road Tottenham Court Road (occasionally abbreviated as TCR) is a major road in Central London, almost entirely within the London Borough of Camden. The road runs from Euston Road in the north to St Giles Circus in the south; Tottenham Court Road tub ...
) in London. Virgin Megastores and Virgin Records operate as entirely separate entities, like many of the other Virgin companies. Throughout the 1980s and 1990s Virgin Megastores opened over 100 stores in the UK, and many others around the world. Simon Wright – Chief Executive of the Virgin Entertainment Group from 1999 to 2009 was very instrumental in the worldwide growth of the stores in particular developing the stores in Asia, the Middle East, Australia and North America before their eventual disposals under licence detailed under Ownership.


Sale and rebrand

In 2007 the Virgin Group was looking to sell the UK and Ireland stores. On 17 September 2007, it was announced that the UK and Ireland arm of the Virgin Megastores brand was to break away from the Virgin Group. A
management buy-out A management buyout (MBO) is a form of acquisition in which a company's existing managers acquire a large part, or all, of the company, whether from a parent company or individual. Management-, and/or leveraged buyout became noted phenomena of 1 ...
offer was accepted. EUK, the company's main stock supplier, also the supplier to shops like Woolworths and
Sainsbury's J Sainsbury plc, trading as Sainsbury's, is the second largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company wa ...
, have helped out with the MBO by investing heavily to support the new management team. With the change of ownership the Virgin Megastores disappeared and were replaced with a new name 'Zavvi'. All 125 stores remained trading and the change was fully implemented by late November 2007. In January 2008 the online system was also rebranded to "zavvi.co.uk" and Virgin Megastores Ireland changed to 'Zavvi Ireland'. On Christmas Eve, 24 December 2008, the "Zavvi UK" group went into
administration Administration may refer to: Management of organizations * Management, the act of directing people towards accomplishing a goal ** Administrative assistant, Administrative Assistant, traditionally known as a Secretary, or also known as an admini ...
following the collapse of Woolworths, which owned Zavvi's supplier
Entertainment UK Entertainment UK Limited (EUK) was a retail supply and distribution company and a wholly owned subsidiary of Woolworths Group. The company, and Woolworths plc, entered administration with Deloitte on 26 November 2008. EUK claimed to have had a t ...
. Simon Douglas, the founder of the entertainment retailer stated: "We have done all that is possible to keep the business trading, but the problems encountered with EUK, and particularly its recent failure, have been too much for the business to cope with." By February 2009, Zavvi had closed its stores, selling some to rival HMV, and a few to Simon Douglas and Les Whitfield's
Head Entertainment Head Entertainment was an entertainment retail chain in the United Kingdom. The company was formed on 18 February 2009 when Simon Douglas, former managing director of Zavvi and business partner Les Whitfield, purchased five stores from Zavvi ...
.


Services

A service called Virgin Megastores Radio (VMR) used to broadcast from its home in the Oxford Street store to the rest of the Megastores. Later this service was stopped and shops played CDs from stock over their own in-shop stereo systems. Employees of Virgin Megastores and Virgin XS/Xpress in the UK and in the Republic of Ireland (with exception Virgin XS/Xpress stores were not in Ireland) wore 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 wore a MOD (Manager on Duty) lanyard. Only the Assistant Manager and Store Manager wore name badges, which also stated their position.


Technology

The computer system at the heart of the UK Virgin Megastores was ''ELVIS'' (
EPoS The point of sale (POS) or point of purchase (POP) is the time and place at which a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice ...
Linked Virgin Information System) which was designed for Virgin in 1991. ELVIS collects data from shop's
point-of-sale The point of sale (POS) or point of purchase (POP) is the time and place at which a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice f ...
terminals for stock and sales reporting; provides instant information for customers on all the shop's product lines, holds play list information for Virgin Megastore Radio (accessible by all shops simultaneously); and allows for electronic re-ordering from suppliers. As of September 2006 ELVIS was updated to use Real Time 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. Virgin also had an online service, http://www.virginmegastores.co.uk, which stocked the same entertainment products as the high street shops and had a 48-hour home delivery guarantee with gift wrapping. An individual service is used by stores to deliver items currently out of stock to customers. The system is called 'Web-Enabled Store' (WES).


Virgin XS

Virgin XS became the clearance arm of Virgin when they were taken over from Sound and Media. Who had set them up to sell off overstocks and deletions from all the major record companies. There were approximately 17 Virgin XS shops and they were all located in mainly small units within factory outlet centres throughout the UK. Virgin XS shops stocked the same charts as normal Virgin Megastores but they also sold 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). The Virgin XS stores were also sold to Zavvi in 2007. These stores did not retain any distinction between them and the ordinary Zavvi stores, as they carried the standard Zavvi branding. All the Outlet stores were closed in January 2009 due to Zavvi entering administration.


Competition

As more and more high street shops and
e-tailers Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the r ...
enter the entertainment sales market, it becomes more competitive. Big name supermarket chains in particular stock popular music and DVDs at ever-lower prices. The video game market is also increasingly competitive. These trends have affected Virgin Megastores' profits In response to the increasing choices available to purchasers of entertainment media, the Virgin chain had employed several strategies in an attempt to secure customer loyalty, and focussed on higher standards of customer service. The 'Addict card' was introduced in 2005, offering customers a stamp for every £10 spent in the shop; 10 stamps entitled customers to £10 off their next purchase. Also introduced was the 'Mega-sharp' approach to customer service: staff were encouraged always to ensure that customers found everything they were seeking. Competition against independent retailers mainly in the music sector did not pose a major threat for big companies such as the Megastores at the time of the Zavvi rebranding. However, customers with a specialist taste usually found the independent shops more appealing, offering more hard-to-find and rarer titles; the firm also suffered from the growing competition from online retailers.


References

{{reflist Defunct retail companies of the United Kingdom 1971 establishments in England 2008 disestablishments in England British companies established in 1971 British companies disestablished in 2008 M