Price deflation hits stock value
Virgin Retail - the company behind the Virgin Megastores chain - made a pre-tax loss of£85 million for the year to April 1, 2006, according to results just filed at Companies House.
Turnover fell from£368 million to£334 million. Pre-tax losses for the previous year ran at£63 million.
The company said it had continued its store closure programme, shutting a further 16 stores over the year.
However, eight stores were also added to the portfolio and 21 were refurbished. The retailer said all these investments had been performing encouragingly.
Market factors, including severe price deflation and changing consumer patterns, have forced a review of its catalogue stockholdings.£5.1 million worth of stock has been written off, because the company no longer feels it can sell the products at full price.
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