Related Companies today announced the acquisition of Virgin Megastores North America. Virgin Megastores North America currently operates eleven stores nationally across 400,000 sq. ft. of retail space. The sale is expected to close in September of 2007.
Related Companies President Jeff T. Blau said, "The acquisition of Virgin Megastores North America is a tremendous opportunity for Related to provide strategic value and exemplifies Related's investment strategy. Virgin Megastores is a well-managed premier retail brand of top-tier entertainment lifestyle stores. Their evidenced commitment to progressive business strategies and service makes them an ideal partner. We look forward to leveraging the resources and synergies between our two great brands."
Sir Richard Branson, founder and chairman of the Virgin Group said, "Virgin Megastores in the U.S. has enjoyed a brilliant two decades as a music and lifestyle retailer, and I am so proud of what we've been able to offer consumers. With most of our global retail operations now franchised, Virgin Group will continue to focus on being a global leader in transportation and renewable energy, with interests in financial services, communications and media, health, and leisure."
Simon Wright, CEO, Virgin Entertainment Group said, "We'd been looking for a strong investment firm to work with to continue the successful repositioning achieved by Virgin Megastores USA. Related has a strong track record of investment and shares Virgin's values. Consistent with Virgin Group's approach taken with partners elsewhere across the globe, we found an ideal partner in Related, one with an outstanding reputation and a shared belief in creating value to the consumer experience at Megastores."
Continuing employment contracts have been put into place with senior management and Related expects to continue to make key investments into the company, its assets and its future. Virgin Megastores has experienced continued growth in 2007 with a 10% increase in comparable music sales through fourth period, and a 17% increase in overall comp sales over last year. Virgin Megastores have also seen significant sale increases in several other departments including an 11% increase in DVD sales and a 26% increase in interactive games' sales, together with an average increase of 30% in fashion and electronics.
The corporate acquisition is another example of Related's value added investment strategy. In 2006 Related acquired Equinox Holding Inc., the premier operator of upscale fitness clubs and spas in New York, Chicago, Los Angeles, San Francisco and South Florida. That same year, Related Companies was part of an investor group that brought leading international developer and operator of destination resorts, casinos and luxury hotels Kerzner International Limited private.
About Related Companies: Heralded as one of the most prolific and visionary developers in the country, Related Companies was formed over thirty-five years ago. Today Related is considered the most prominent privately owned real estate development firm in the United States, headquartered in New York City with divisions in development, acquisitions, property management, marketing and sales. In 2004, Related completed the development of New York City's newest landmark, Time Warner Center. Related has offices and major developments in Miami, Los Angeles, San Francisco, Chicago and Boston and boasts a team of more than 2,000 professionals. To date, Related has real estate assets worth over $16 billion with another $10 billion currently in development. In Los Angeles, Related is expanding its portfolio with The Century, a super-luxury condominium in Century City and the Frank Gehry-designed Grand Avenue development, situated directly across from the beloved Walt Disney Concert Hall, which will include luxury residences, retail, notable restaurants and a world class hotel. Related Companies is staunchly committed to sustainable design with over $6 billion in green development underway or completed. The firm developed one of the first green residential buildings in the nation, Tribeca Green in Battery Park City, New York and Chicago's first green residential building, 340 on the Park. Related is currently developing eight new LEED-certified residential buildings, The Brompton, The Harrison, and Superior Ink in New York City, The Clarendon in Boston, The Century in Los Angeles, The Village in Santa Monica, Canyon Ranch Living and The Peshtigo in Chicago as well as Bronx Terminal Market, a one million square foot retail development in Bronx, New York and Snowmass, Colorado, a $2 billion mixed-use redevelopment. Related also serves on the board of directors of the World Resources Institute. This past year, Related acquired Equinox(R) Fitness Clubs, further expanding the company's capabilities into the health and fitness arena and enhancing the value of its properties by incorporating an exclusive, branded amenity into the lifestyle offering. The company is also the largest shareholder in Centerline, the leading financier of affordable housing in the country. For more information about Related Companies please visit www.related.com.
About Virgin Entertainment Group: Virgin Entertainment Group is the world's leading multi-channel music and entertainment retailer, providing customers with a range of superior entertainment experiences through a family of integrated Virgin-branded businesses. The "category killer" Virgin Megastores and Virgin Megastore Online at www.virginmega.com are integral parts of a strategy to provide entertainment customers with what they want, how they want it, and when they want it. For more information, or to check out the location of the nearest Virgin retail, go to www.virginmegamagazine.com.