Wednesday 9 January 2013, 10:32 | By Chris Cooke
Virgin France to declare itself insolvent today
The Virgin France retail chain will formally declare itself insolvent later today, according to Reuters.
It emerged last week that the French entertainment retailer was on the brink, and talks with staff representatives have been taking place since the start of the week. The commercial courts in Paris will now decide whether the loss-making company, which operates 26 stores, can be restructured in a way that might save some of its outlets.
As previously reported, Virgin France has not been part of Richard Branson’s Virgin Group since 2001. Equity group Butler Capital now owns 80% of the business, and its representatives have been involved in this week’s talks. Speaking for Butler, Laurent Parquet told reporters yesterday: “Virgin has been going through difficult times for a long time. We have invested a lot in this company. We tried to straighten out the company’s accounts. Now our concern is to find the best possible solution”.
As Virgin France faces closure, the UK record industry remains focused on HMV, which is busy renegotiating the terms of its bank loans after admitting it will fail covenant tests this month. Management at the British retailer have announced a major sale across its stores kicking of this weekend, presumably hoping to give a boost to sales in a traditionally quite time for entertainment retail in a bid to placate bankers.