Virgin Entertainment Group North America continued its winning streak in the first quarter of its fiscal year, posting a 15% comparable-store increase in the period ended June 30, according to VEG CEO Simon Wright.
That comes on the heels of a 5.2% comparable-store gain in its fiscal year ended March 31.
What’s more, the company managed to reap a 9% increase in comparable-store sales for music in a U.S. marketplace that shows a 14.3% decline in album sales, according to Nielsen SoundScan.
“Clearly, we are picking up business from competitors that went out of business; I won’t deny that,” Wright says. “But we are also picking up business from the re-merchandising of the store. We are showing significantly more traffic in our stores and we are converting more of those visits into sales.”
He says the chain’s store traffic to sales conversion rate is up 10%, while the average revenue per basket has increased by 5%.
What’s more, for the first time on a running 12-month basis, the chain’s Times Square store in New York has broken past the $50 million in annual sales mark, making it, the company claims, the highest volume store in the world.
Combined with sales of the chain’s 14th Street store, it puts VEGNA near its goal of reaching $100 million in annual sales from the New York market. While VEGNA is not a publicly traded company, it periodically discloses some financial information.
In addition, Wright says the company’s V.I.P. loyalty program, which launched nine-months ago, has emerged as an unqualified success that has helped boost sales. Since its launch the company has singed up 150,000 members, Wright reports.
Along those lines, VEGNA plans to boost customer interaction by launching an online Social Media Newsroom, which will offer video, podcasting and up-to-the-minute news and gossip for consumers and the media. That space will be a part of a relaunched virginmega.com, which had once upon a time sold merchandise until the company partnered with Amazon and directed all Virgin Megastore traffic to the giant online merchant.
In addition to reclaiming the sales of CDs and DVDs, the site — which will be hosted and fulfilled by Baker & Taylor, with VEGNA managing the site content –will also feature the other product lines that have been so instrumental in revitalizing the Virgin brand in the U.S., according to Wright.
“Our apparel shows signs that it is starting to mature in our product selection but we are still getting good sales growth on less inventory,” he says. “The thing that has really taken off for us this year is electronics.”
“It took awhile for people to get used to buying cameras from VEGNA,” Wright continues. “Electronics as a whole is doing well for the chain, too.”
Meanwhile, Wright says the company’s frequent $10 campaigns, which feature many popular CDs at the price point, has really resonated with the chain’s customers and is one of the reasons why its music sales are up.
Likewise, Wright reports that DVD sales are up 11%, even though movies sales growth is slowing down at most other chains. He attributes that to the chain’s large selection and strong sales for TV on DVD category.