Sir Richard Branson has cut ties with one of his first businesses by selling the British and Irish Virgin Megastore retail chains to a management buyout team.
The deal, for an undisclosed sum, was concluded late on Friday evening. Virgin stores will be rebranded "zavvi" after the business was bought by Zavvi Entertainment Group.
The group is the third-largest music retailer in the Irish market by sales, with 11 stores in Dublin, Limerick, Cork, Dundalk, Sligo, Athlone, Kilkenny and Arklow.
The Irish unit had pretax profits of €1.9 million and a turnover of €23.46 million in the year to March 2005, the last period for which figures are publicly available. A number of Irish stores have opened since then.
Zavvi is a vehicle for a management buyout team led by Simon Douglas, managing director, and Steve Peckham, finance director.
With this deal, Sir Richard has parted with an asset that was seminal in the development of the Virgin brand. In 1970, he founded Virgin as a mail-order record retailer and a year later he opened a record shop on London's Oxford Street.
"We now choose to franchise our global entertainment retail operations, rather than own them, and this was the last significant Virgin wholly-owned retail business in the world. The Virgin brand will continue to be represented in-store through the Virgin Mobile and Virgin Media in-store concessions," he added.
Some 125 stores will transfer and be renamed by November.
The sale of Virgin Megastores comes as Sir Richard makes a number of strategic departures for the group. He has several high-profile launches coming up, such as Virgin America, a US airline, and Virgin Galactic, a business that aims to fly commercial passengers into space by the end of 2008.
- (Financial Times service)
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