Photo credit: Virgin Megastore France
Virgin Megastore’s French operation will next week declare itself insolvent as it becomes the latest casualty in a string of high street entertainment retailers that have fallen prey to the rise of online sales and downloads.
Virgin France’s books and music division employs around 1,000 people with 26 stores across the country. The company will next week unveil a plan to file for payments suspension at a meeting on 7 January, the first step towards a court-ordered company restructuring in France.
The chain, which was sold by Richard Branson to Lagardere in 2001 and later to Butler Capital Partners in 2007, is thought to have an estimate debt of EUR 22 million, according to a report by Reuters.
There was speculation that HMV could face a similar fate earlier this week after it emerged lenders had blocked a potential bid from US investment company Apollo Global Management, with hopes the retailer could survive without a takeover.
In recent years increased pricing competition online and a rise in illegal downloads has left music, books and entertainment retailers struggling to stay afloat on the high street. Both Borders and Virgin Media’s UK arm of high street Megastores, Zavvi Entertainment Group failed to keep up with online giants such as Amazon.