Acquisition Resources

Virgin Megastores has been sold by Sir Richard Branson for an undisclosed sum to a management buy-out team. The team was led by managing director Simon Douglas and finance director Steve Peckham, which made the acquisition through buy-out vehicle Zavvi Entertainment Group. Some 125 UK stores will now be rebranded as Zavvi.

The UK and Irish chain was the last wholly-owned retail business in the Virgin group, as it has been divesting its entertainment retailing operations over the past six years by franchising out its international business. In-store Virgin Mobile and Virgin Media concessions will continue to represent the brand. The deal will not effect any of the 2,500 jobs across the chain.

Mr Douglas said of the sale “This deal secures an exciting future for Zavvi and for all our staff, with a real belief that, despite escalating competition, there is still very much a place on an increasingly homogenised high street for an independent entertainment specialist.” 

Branson, said to be “slightly sad” at the sale of the business he established in 1970 that set him on the road to riches, commented: There’s no question that with online sales and cheap supermarket prices that music retailing has become a different business than it was 30 years ago when I started.”