Strong Christmas sales growth for Virgin Megastore company

A 70% rise in online sales helped the former Virgin Megastore chain post double-digit Christmas sales growth in its new guise, bosses said today.

Now trading as "zavvi" after a management buy-out last year, the entertainment retailer enjoyed 10.2% increase in like-for-like sales for the four-week period to January 5.

The figure contrasted with a profit warning from Currys and PC World owner DSG international after poor festive sales, and a flurry of other gloomy news from the High Street this year.

Zavvi managing director Simon Douglas - who led the buy-out from Richard Branson's Virgin empire - said: "When you consider the downbeat message of the high street from certain quarters, our trading performance is very encouraging.

"Although the team has a rich history in entertainment retail, there's no getting away from the fact that zavvi is the newest kid on the block as far as customers are concerned so to perform as well as we have during such an important trading period has to be taken as a huge positive."

Total sales at the group's 122 UK and Ireland stores was up 10.8%, with a margin lift of 2%.

Games was by far the best performing part of the business, up 62.7% like-for-like, followed by books and clothing which jumped 45.2%.

Sales of DVDs grew 6.4%, with booming box set performance offset by price pressure on chart releases. Zavvi said its market share of the growing Blu Ray and HD range peaked at 15.8%, fuelled by greater availability of the new film technology.

Music sales were down 11.6%, due to more enforced cost cutting.

Management said they were optimistic about this year however with releases scheduled from heavy-hitters such as Coldplay, Madonna, Oasis, U2, Kasabian and Razorlight.

New zavvi stores are also being planned for Belfast, Camberley, Bristol and Liverpool.

Branson opened his first Virgin Megastore 30 years ago in London's Oxford Street. Announcing the chain's sale in September last year, the entrepreneur said his multimillion-pound Virgin Group had chosen to move away from retailing into licensing music.

Mr Douglas said: "For a business that launched on September 14 with a brand new name, Christmas trading has been excellent.

"This year will also see a further push to grow our e-commence business which will play a key role in the future success of zavvi."