Virgin Megastore France to file for insolvency January 9

PARIS Tue Jan 8, 2013 11:30pm IST

Stocks

   

PARIS (Reuters) - Books-to-music retailer Virgin Megastore France will formally declare itself insolvent on Wednesday, the latest casualty of an industry-wide slump in CD and DVD sales as consumers download more film and music online.

The filing, the first step towards a possible court-ordered company restructuring in France, coincides with the start of winter clearance sales in a morose economic climate.

Shoppers are reining in spending in the euro zone's second-biggest economy where the total number of people out of work is at a 15-year high [ID:nL5E9C2AB6].

Virgin Megastore France, which employs 1,000 people, met staff representatives on Monday and Tuesday. Laurent Parquet, a representative of majority-owner private equity firm Butler Capital Partners, also attended the meetings.

"The company is in a situation of payment suspension and management said it could not let this continue," Virgin Megastore France said on Tuesday. "This filing for insolvency will thus take place from tomorrow."

The commerce court will decide whether the firm, which operates 26 Virgin-branded stores in France, including a flagship operation on the Champs-Elysees in Paris, can be restructured or should be closed down.

The group, which has annual sales of nearly 300 million euros ($392 million), has been loss-making for the past four years. It has blamed its problems on rental costs in high-profile city centre locations, falling CD and DVD sales and a recent drop in book sales.

Laurent Parquet said: "Virgin has been going through difficult times for a long time. We have invested a lot in this company. We tried to straighten out the company's accounts. Now our concern is to find the best possible solution".

Guy Olharan, a representative for the CGT union said he was still hoping a buyer could be found. After meeting culture minister Aurelie Filipetti, Olharan said: "We hope the French government will actively engage itself on our side". Workers will protest in front of the Champs-Elysees store on Wednesday.

Butler Capital Partners bought a majority stake in Virgin Megastore France in 2007 from media-to-aerospace group Lagardere (LAGA.PA) which itself bought the chain from founder Richard Branson in 2001.

(Reporting by Dominique Vidalon; Additional reporting Marine Pennetier; Editing by Dan Lalor)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-China Ties

REUTERS SHOWCASE

Scotland Referendum

Scotland Referendum

Scots vote in record numbers, await independence verdict.  Full Article 

India-US Diplomacy

India-US Diplomacy

Obama to nominate Indian-American Richard Verma as India ambassador - congressional source.  Full Article 

GMR in Nepal

GMR in Nepal

Nepal clears India’s GMR plan for $1.4 bln hydroelectric plant.  Full Article 

LIC on Markets

LIC on Markets

LIC chairman bullish on Indian markets  Full Article 

India Rains

India Rains

Monsoon rains weaken as late retreat looms.  Full Article 

Ellison Quits

Ellison Quits

Oracle's Ellison steps aside, co-CEOs Catz and Hurd take over.  Full Article 

Infosys-Huawei

Infosys-Huawei

Infosys partners with China's Huawei for cloud-based services  Full Article 

Gold Outlook

Gold Outlook

Gold imports seen up, premiums likely to double on festive buying  Full Article 

Trade Dispute

Trade Dispute

U.S. to press India on trade row during Modi's Washington visit  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage