7/9/2009 10:33:00 AM
Virgin adds 40 stores as it concentrates on TV and broadband
Virgin Media’s store expansion plan is ticking along slowly with the addition of 10 new shops.
The company’s total direct store estate is set to reach 40 by the end of 2009, with a further 30 stores earmarked for 2010.
Store locations are being chosen based on whether Virgin’s cable infrastructure exists in the local area, as opposed to the most high profile shopping locations. The sites are around 1,200 sq ft.
The outlets are designed to showcase Virgin’s TV and broadband capabilities with high-definition plasma screens, and feature the company’s prized cable assets under the banner of ‘super fast broadband’.
Cable TV and broadband is central to Virgin’s strategy, and sources close to the company claim Virgin Mobile is no longer a standalone business, ‘but a secondary product line for the bigger company’.
Virgin is also looking to mimic rivals Sky and BT with around 25 to 30 kiosk-like stands in shopping centres.
The company is unlikely to emulate the vast store portfolios of mobile operators, which typically have 400 stores each. Virgin will prefer to stick to around 150 sites and focus only on areas with access to cable infrastructure.
Virgin’s mobile customer base is understood to be at around three million, having dropped from five million at the time it was sold to NTL in April 2006 for just under £1bn.
One source said: ‘The incentives for the staff are broadband and TV. Mobile is more of a nice-to-have.’
Virgin Mobile had been severely affected by the collapse of Woolworths and Zavvi in close succession six months ago, but a spokesman said the company was winning strong sales through its own direct channels, as well as the likes of Carphone Warehouse and Phones 4u.
Virgin Media is capitalising on the depressed retail property market with excellent rent deals.
Landlords are continuing to offer flexibility on lease terms for shops such as shorter lease periods, earlier break clauses, ‘rent holiday’ periods, and are even contributing to the cost of setting up stores.