Virgin Megastores to turn 'zavvi'

The Virgin Megastore retail chain has been sold for an undisclosed sum by Sir Richard Branson to the Zavvi Entertainment Group.

The stores will be rebranded as 'zavvi' across the UK by the end of November, with the online presence and stores in Ireland receiving similar treatment by January next year, according to details in a report on FT.com.

The Zavvi Entertainment Group, led by managing director Simon Douglas and finance director Steve Peckham, was set up to enable a management buy-out of the high street chain.

The move completes Branson's change of direction from wholly-owned subsidiaries to franchises, with the property that kicked off the Virgin empire in 1970, although he stated that the name will still live on in part: "The Virgin brand will continue to be represented in-store through the Virgin Mobile and Virgin Media in-store concessions."

According to the report, a potential deal with HMV had fallen through because of a mismatch in valuation and structure ideas.