SOURCE: Virgin Entertainment Group North America

February 21, 2007 08:00 ET

Virgin Megastores Continue Retail Success in First Quarter With Launch of V.I.P. Loyalty Program

Virgin Megastores Celebrates 40,000 Member Customer Loyalty Program

LOS ANGELES, CA -- (MARKET WIRE) -- February 21, 2007 -- North American Virgin Megastores have seen great success over the past year with a 5% spike in overall sales; a sign that not all music retailers are succumbing to the music industry's turbulent market. Now Virgin Megastore executives have even more to celebrate as membership in the chain's new V.I.P. Customer Loyalty Program is also on the rise. Virgin Megastores launched the new loyalty program just a few months ago in two of the brand's most profitable locations -- California and New York. Within a few months over 40,000 customers have signed up for the Virgin V.I.P. Customer Loyalty Program. The V.I.P. program is a first of its kind in North America and offers its members special privileges such as: trips, backstage concert passes, celebrity meet and greets, and deep discounts on selected store products.

"Our goal at Virgin has always been to offer customers what they want, when they want it," explains Dee Mc Laughlin, senior director of marketing, Virgin Entertainment Group, North America. "Our new V.I.P. Loyalty Program has allowed us to really target our repeat customers and offer them incentives and unique rewards to continue to shop at our Megastores."

Virgin has rolled out the program in 7 of the chain's 13 stores, as a way to test the program. Virgin Megastore, Times Square has seen the largest enrollment in the program so far. On average, Virgin enrolls over 2,500 new members each week, which is showing Virgin executives that the program is a good incentive for its faithful customers.

"In many of our stores our V.I.P. members are making up 15% of the total sales. This program is exceeding our expectations," Mc Laughlin further explains.

Part of Virgin's goal with the program was to drive new business into the stores, but first they needed to gauge consumer loyalty, which is often hard to estimate without tracking technology. Using a patented thermo graphic rewritable card, the new program has shown that on average Virgin customers return to purchase a new product at a Virgin Megastore every 5-8 days. The program has also revealed to Virgin executives that repeat customers are not only purchasing music but there's also been a significant increase in DVD, games, electronic and apparel sales in last four months.

Virgin Megastores set out with an extensive $1 million dollar refurbishment and product diversification strategy, in several of the key stores, a couple of years ago. Under the new strategy Virgin expanded the product offer to include more DVD, games, electronic and apparel selections. The information gathered by Virgin's new V.I.P. program is proving to the brand's executives that their continued commitment to shift the Virgin Megastores into an entertainment lifestyle store is exactly what appeals to Virgin customers.

In the past few months Virgin Megastores have rewarded select V.I.P. members with over $100,000 in prizes including: trips to London and Australia on Virgin Atlantic Airlines, Sony Playstation 3 Systems, Sony Oscar home theatre packages, Virgin Mobile phones and Hilton Hotel and Mandarin Oriental hotel vouchers. V.I.P. members have also been invited to meet Sir Paul McCartney, Jay-Z, Pamela Anderson, Snoop Dogg, James Blunt, and others.

Virgin Megastore's V.I.P. Customer Loyalty Program is free to join. Customers simply fill out an application in the store to join the program. Currently the program is available at Virgin Megastores in California and New York.

For more information about Virgin Megastores or the V.I.P. Customer Loyalty Program go to www.virginmegamagazine.com.

ABOUT VIRGIN ENTERTAINMENT GROUP

Virgin Entertainment Group is the world's leading multi-channel music and entertainment retailer, providing customers with a range of superior entertainment experiences through a family of integrated Virgin-branded businesses. The "category killer" Virgin Megastores and Virgin Megastore Online at www.virginmega.com are integral parts of a strategy to provide entertainment customers with what they want, how they want it, and when they want it. For more information, or to check out the location of the nearest Virgin retail, go to www.virginmegamagazine.com

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