It seems digital music sales and illegal file-sharing are about to claim yet another victim of the recording industry. In light of the closing of the iconic Times Square Virgin Megastore in April, the chief executive of Virgin Entertainment Group Inc. announced that the six remaining U.S. Virgin stores will be closed by Summer due to the slowing of the economy and declining record sales.
Vornado, the company that owns the Times Square location, pressured the struggling chain to either pay more rent or leave the property. According to the Vornado executive vice-president, Virgin pays $54 a square foot in an area where rents are around $700 a square foot because of the prime location. The location in Times Square will be now taken over by clothing store Forever 21.
The Times Square location will close in April, and will be followed by stores in Los Angeles, San
Francisco, Orlando and Denver, all before summer. By then, about 1,000 staff members will be laid off, plus 60 employees from corporate. All other stores were closed last year.
Despite broadening its product offerings to apparel and electronics, Virgin continued to lose out to digital music sales and online music stores like iTunes in the past few years.
Virgin Megastores will be gone after nearly two decades of massive CD-release parties and splashy store opening stunts. About 150 Virgin Megastores remain in the rest of the world, with stores in France, Australia, Japan and the Middle East, all owned by local
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