Virgin Entertainment Group Inc. will close its only Canadian store, located in Vancouver. The company had initially planned to expand across Canada with its next store to open in Toronto, but instead has decided to pull out of Canada altogether.
“It is not feasible to continue to run a single store in Canada any longer,” the company noted in a statement. Vancouver is considered a very competitive music retail market that has resulted in some of the lowest prices in the world. The Vancouver store’s closing will allow Virgin to concentrate on its U.S. business.
HMV Canada Inc. will take over Virgin’s Vancouver operation effective September 4th. The store contains 40,000 square feet over three levels and is the largest music retail outlet in Canada. It will carry over 400,000 separate CD and DVD titles.
Current Virgin employees will become HMV employees. HMV already operates eight stores in the greater Vancouver area, with two more to open this summer. The Virgin store will be HMV’s first outlet in downtown Vancouver and will be designated the company’s “flagship” store for the city. HMV plans to increase the store’s inventory by 25 to 50 percent, specifically by increasing the store’s CD and DVD catalogue.
HMV is a specialty retailer, as opposed to a “big box” retailer or a mass merchant. The company has 102 stores in Canada and plans to open another 50 over the next few years. It currently has 1,600 employees across Canada. HMV Canada Inc.’s annual sales of approximately $370 million increased, on a same-store basis, by 13.5 percent for the year ended April 30th. Same store sales increased yet again by 12.3 percent for the seven weeks ended June 18th.
Two years ago, the company decided to boost its DVD selection, and DVDs now account for over 40 percent of the company’s sales. Last year, HMV closed the last of its U.S. stores.
(Abstracted from Virgin’s Withdrawal Music to HMV’s Ears, by Marina Strauss, globeandmail.com, June 29, 2005; HMV to Open Canada’s Largest Store Dedicated to Music & DVD, Marketnews, June 28, 2005; and Q&A – Humphrey Kadaner, HMV Canada, Canadian Music Network, July 7 – July 13, 2005)
