The closure of the Virgin Megastore in the centre of Dublin in May 2002 was responsible for a €2.5 million fall in sales at Virgin Group's retailing subsidiary in the Republic last year.
Despite the dip in revenues at the music and entertainment retailer, Virgin Retail managed to cut its annual loss to €797,000 in the year to the end of February 2003, down from €1.5 million in the previous 12-month period.
New figures filed with the Companies Registration Office show Virgin Retail made revenues worth €23.4 million in the 12 months to the end of February 2003, a fall from the €25.9 million made in the previous 13 months.
Virgin Retail sells all forms of recorded music, video, DVDs and computer games software.
A Virgin Retail spokesman said the closure of the Virgin Megastore in the centre of Dublin, which was the group's largest store, was primarily responsible for the fall in sales.
He said the value of worldwide music sales would also appear to be declining due to factors such as the entry of supermarkets into the market and downloading of music over the internet.
However, Virgin confirmed yesterday it remained committed to expanding in the Republic and said it would open a a new Virgin Megastore in the Dundrum shopping centre in early 2005.
Mr Mark Johnson, Virgin's regional manager for Ireland, said this new store would be 11,000 square feet, making it Virgin's biggest in the Republic.
The new store is likely to create more than 40 new jobs and boost Virgin's Retail's total employment level to almost 200. In 2003 the average number of staff employed by Virgin was 145.
The firm is also continuing to look for a flagship site on either Henry Street or Grafton Street to expand, added Mr Johnson. Virgin Retail currently has four retailing stores in Dublin and one in Cork.
Virgin Retail's business in Ireland has not proved profitable for the music firm, which is ultimately owned by a company controlled by the British entrepreneur, Sir Richard Branson.
Virgin Retail's 2003 financial accounts show the company has accumulated losses worth some €6.3 million since entering the Irish market in 1986.
The firm's auditor's KPMG advised that an extraordinary general meeting should be convened because the net assets of the company were not more than half of the amount of the called up share capital.
