London-based music and home entertainment merchant Virgin Retail has formalized a centralized stock management deal for its stores in the United Kingdom and Ireland.

London-based music and home entertainment merchant Virgin Retail has formalized a centralized stock management deal for its stores in the United Kingdom and Ireland.

With effect from July 1, Chipping Warden, Oxfordshire-based Hays Logistics will warehouse and distribute virtually all stock for Virgin Retail's 165 stores. Hays provides supply chain services for clients in 11 European countries. Virgin Retail operations and logistics director Doug Morton tells Billboard.biz that the new contract "formalizes a project Virgin has been building [with Hays] dating back to October 2002."

Virgin Retail is part of the Virgin Entertainment Group. It operates its United Kingdom and Ireland outlets under the Virgin Megastores and Virgin Xpress names. Over the past 18 months, Hays has been servicing the stores with their home entertainment stock from its 75,000 square feet warehouse near Banbury, Oxfordshire. A few minor product lines will continue to be supplied independently after July 1. The warehouse IT system is linked to Virgin Retail's own central IT network. At seasonal peak times, Hays says it will operate a 24/7 service for the retailer.

Virgin stores receive all stock in one single daily delivery from Hays, rather than receiving a string of deliveries to individual stores. Hays also bar-code and price-sticker all product so it can be racked upon delivery to stores. According to Hays, the new deal is worth £35 million ($61.5 million), spread over a five-year period.

In a statement, Virgin Retail COO Dennis Henderson said "far from the supply chain logistics side of our operation being seen as a necessary evil, we have turned it on its head and used it as an opportunity to drive margins and increase our bottom line."

No impact on staff levels is expected at Virgin Retail, which employs some 3,500 people in the United Kingdom and Ireland. Labels body the British Phonographic Industry (BPI) says Virgin Retail accounted for 10.3% of the U.K. albums market and 16.2% of the singles market in 2003.

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