You know things are bad when the largest volume brick-and-mortar music retailer voluntarily shutters its business. It was announced yesterday that the Virgin Megastore in Times Square, which apparently does around $55 million in annual sales and clears about $6 million of that in profit, is closing down. Of course, the proverbial handwriring was on the wall in 2007 when Virgin sold it’s US retail operation to a tandem of two real estate companies.
Virgin had a sweet deal on that space and the the lease value is reportedly around 15 times what Virgin pays. So, while it does incredibly well for a music store, not so much when stacked up against what the property could bring in. Virgin still has a store in Union Square, but that is sure to disappear at some point in the future, as will the other remaining four Virgin outlets. Yeah, no matter how bad the real estate market gets, it will never be as bad as the retail market for physical music goods.