Despite heavy declines in the US-based music retail market, Virgin Megastores pointed to strong gains last quarter.
The chain, which focuses on colossal, diversified entertainment retail locations in urban areas, experienced strong comparable-store increases during the recent period. For the fiscal first quarter ending June 30th, same-store revenues boosted 15 percent, while music-specific sales improved 9 percent. The company did not disclose broader revenue figures, and vaguely pointed to a “significant increase in profitability” without delving into hard numbers.
According to Virgin executives, diversification has been a key ingredient for success. The strategy involves a number of entertainment assets, including games, DVDs, consumer electronics, magazines, and even cafes. That approach has shaped an “entertainment lifestyle store, rather than solely a music retailer,” a plan other retailers have been pursuing less successfully. “We will continue to bring in products that we see a strong need for as we are confident that this diversification strategy has been the key to our success,” said Simon Wright, chief executive at Virgin Entertainment Group International. Meanwhile, the exit of rival stores like Tower have funneled traffic into Virgin Megastores, and bumped sales accordingly.