Virgin Entertainment To Close Remaining U.S. Megastores

March 3, 2009 7:09 p.m. EST

Los Angeles, CA (AHN) - In another sign of the times, Virgin Entertainment Group said it will close the six Virgin Megastores remaining in the U.S. by this summer.

Virgin has seen its record stores struggle in recent years as consumers have turned to retailers like Best Buy and Wal-Mart for their music purchases.

Sales at the six stores totaled $170 million last year, much lower than the $230 million produced in 2003 when Virgin operated 23 stores and sales were robust.

"The lack of expansion plans and a recent decision to close the Times Square location in New York, which had been on track to make $56 million last year until the financial collapse began in September, made supporting the rest of the chain untenable," said CEO Simon Wright, according to the Associated Press.

The company's 52,000 square-foot flagship Times Square location will close in mid-April. Other locations being shutdown of in Los Angeles, San Francisco, Orlando, Denver and a second location in New York.

The move will lead to 1,000 store employees being laid off, along with another 60 at the corporate level.

Virgin still has 150 megastores throughout the world, which are owned by local companies with licensing agreements.