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French cultural product chain Virgin Megastore plans to file for cessation of payments, the first step towards receivership or liquidation, a spokesperson confirmed to The Bookseller this morning (4th January).
An extraordinary works council meeting has been called for next Monday (7th), when the unions will refuse to give an opinion on the proposal, according to Sylvain Alain, the representative of the SUD union. "This will give us time to mobilize the staff," he told The Bookseller. The group informed the staff on 19th December that it would give up the lease on its flagship store on the Champs Elysées in central Paris, which brought the staff out on strike 10 days later.
The group, which is controlled by Butler Capital Partners and reported a turnover of €286m last year, suffered losses in 2009-2011 and is expected to have done the same in 2012. Its payroll now stands at 1,000, down from 1,200 two years ago following the closure of five of its 31 stores since the end of 2011 and job cuts at head office.
CD and DVD sales have slumped sharply in France overall in recent years, and book sales shrank by 3% in 2012, the group’s spokesperson said. Until then, book sales had held up reasonably well since the economic crisis began, either rising slightly or remaining stable.