VIRGIN ENTERTAINMENT GROUP LIMITED ACQUIRES VIRGIN OUR PRICE FROM W H SMITH GROUP PLC
Virgin Entertainment Group Limited ("VEG") is delighted to confirm that it has today completed the unconditional acquisition of Virgin Our Price ("VOP") from W H Smith Group Plc for £145 million.
Commenting on the acquisition Richard Branson said:
"After many years of a successful joint venture with W H Smith, we are delighted to now have Britain's most successful entertainment retail brand back in the fold. The success of Virgin Cinemas in the UK and Ireland and the management of our overseas Megastores can now be comprehensively developed in co-operation. The prospects of Virgin's retail and cinema brands working together is particularly exciting and should bring particular benefits in the UK and Irish markets."
Following the acquisition VOP is to be reorganised into its two constituent businesses, Virgin Retail and Our Price. This will involve the creation of two separate boards and management teams. Mike McGinley, who has been acting Managing Director of VOP for the past 18 months, is to become the Managing Director of Our Price. The Managing Director of Virgin Retail will be Simon Wright, who is currently Finance Director of VEG.
The other Directors of VOP will, for the most part, be joining the board of one of the two new businesses: Neil Boote will become Commercial Director of Our Price, whilst Julian Ghinn, Elaine Rowe and Steve Kincaid will join Virgin Retail as Finance, Operations and Commercial Directors respectively. Brad Henderson, currently IT Director of VOP, has indicated his intention to leave the company in January 1999.
After the split, Virgin Retail will have 88 stores in the UK and Ireland accounting for some 60% of VOP's turnover, whilst Our Price will have 229 stores accounting for the balance. It is intended that the split will not generate a significant increase in overhead costs.
Simon Burke, Chief Executive of VEG added:-
"The merger of Virgin Retail and Our Price in 1994 brought significant financial and operating benefits at the time. We have now progressed to the point where we can develop a much greater brand focus whilst retaining these benefits. With this new arrangement, we will have two management teams each focused on the development of their business and brand. I expect this to be a major benefit to those businesses and their customers."
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