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French books, music and movies chain Virgin Megastore will almost certainly go into liquidation next week.
The Paris commercial court yesterday (10th June) rejected the two remaining bids to take over some outlets and will meet next Monday to decide on the next step for the 26-store group.
The last two of the five initial bids were from the Cultura chain of stores and ready-to-wear and shoe chain Vivarte, both of which got the thumbs down from the unions. The best hope had been the art supplies group Rougier et Pié, which promised to keep the brand by acquiring the licence for 11 of the 26 stores and saving 285 of the group’s 960 jobs, but it pulled out in mid-May.
Virgin Megastore, which filed for bankruptcy in January, was founded in France in 1988 by Richard Branson with Patrick Zelnick, c.e.o. of music publisher Naïve, at the helm. The Lagardère group bought the chain in 2001 and sold 74% of its stake to French private equity firm Butler Capital Partners in 2008.
Like Fnac, the leading French cultural product chain, Virgin has suffered from a sharp drop in sales of CDs and DVDs as Amazon and the rise of competing e-tailers. Though books—which comprised about 20% of Virgin's €286m turnover in 2012—had remained stable for the chain during most of the financial crisis, the category slumped last year, down 3% year on year.
The costly flagship store on the Champs Elysées, attracted no potential buyers and is expected to become a Volkswagen showroom.