Challenges ahead as Virgin becomes Zavvi

Virgin Megastores managing director Simon Douglas has admitted that rebranding Virgin Megastores to Zavvi will pose challenges for the retailer.

This week, Virgin Megastores was sold as part of a management buy-out led by managing director Simon Douglas and finance director Steve Peckham.

Douglas conceded that the Virgin name has a “huge legacy to live up to”, but said the short-term focus will be on Christmas and keeping “staff on board”. He said: “Zavvi reflects a modern take on the word savvy; both knowledgeable and clued-up.”

Douglas was adamant that the deal will not result in job losses at the chain, which employs about 2,500 staff.

The buy-out team, Zavvi Entertainment, has bought the 125-store chain from Sir Richard Branson’s Virgin Group. Douglas said rebranding the stores and web site was part of a deal agreed with Branson.

Douglas declined to provide details about the rebranding ahead of it being unveiled at a staff conference on October 3.

The new logo is set to be finalised next week and the group’s UK stores will be rebranded before November. Its web site, along with Irish stores, will be rebranded in January. The group is also set to open four stores and a standalone web site in Ireland by the end of the year.

Douglas said Zavvi’s independence would allow management to make quick decisions on a day-to-day basis. He said: “The team has a wealth of passion and experience. We will now be able to concentrate on the retail issues.”

Branson said: “The Virgin brand will continue to be represented in stores through the Virgin Mobile and Virgin Media in-store concessions.”

The Entertainment Retailers Association (ERA) has welcomed news of the deal. ERA chairman Paul Quirk said: “This is no surprise. Branson has been moving away from his roots in music for years.”