Branson Lets Go Of Record Shops

Richard Branson has let go of one of the first businesses he created, selling his Virgin Megastore chain to a management team led by two of the firm’s directors.

Managing director Simon Douglas and finance director Steve Peckham formed Zavvi Entertainment Group to lead the September 14 deal. Terms of the deal were not disclosed.

The 125 stores will transfer and be renamed "Zavvi" by November.

Branson founded Virgin as a mail-order record retailer in 1970, opening its first high street record shop in London’s Oxford Street a year later.

The Virgin brand will continue to be represented in-store through the Virgin Mobile and Virgin Media in-store concessions.

The company also held talks with HMV Group, although a potential deal with the high street rival foundered on valuation and structure.

The traditional music retail business model is under threat from physical piracy, illegal downloads and competition from the growing number of supermarkets expanding their music sections.