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Music store to close; make room for clothes

By John Schmeltzer and Eric Benderoff
Tribune staff reporters.
Published May 19, 2007

Virgin Megastore, which opened less than a decade ago at one of the highest-profile intersections on Michigan Avenue, is closing.

The chain, in a statement e-mailed to the Tribune, said that it will close its Chicago and Salt Lake City stores in July. That will bring to seven the number of Virgin outlets that have been shuttered since last year as the music industry undergoes a seismic shift with growing competition from online music sales.

Virgin's Chicago space will be taken by Forever 21, which will open a Forever XXI store in the 40,000-square-foot space, according to Larry Meyer, senior vice president and chief financial officer of the Los Angeles-based clothing chain. It will continue operating a Forever 21 on State Street as well as one in Water Tower Place.

"We view Chicago as a big city where we can have stores in the same general area and satisfy multiple customers," said Meyer, who said the chain hopes to open its new store this fall.

Forever XXI, the name that the 390-store chain uses for its larger stores, offers men's and women's fashions, as well as lingerie, footwear, cosmetics and other accessories.

Opening the larger store will allow it to compete more effectively against other chains like the Swedish fashion retailer H&M, which is located at the north end of Michigan Avenue. Virgin is at the corner of Michigan Avenue and Ohio Street.

Forever 21 has 10 stores in the Chicago area, and H&M has eight.

The closing of the Chicago and Salt Lake Virgin Megastores will leave Virgin with 11 music stores still operating in the U.S. It operates more than 100 Megastores in the United Kingdom.

Chicago employees were told of the plans on Friday.

The London-based store, a unit of the Virgin Group, a UK-based conglomerate owned by Richard Branson, said it "believes that its mission of creating the finest entertainment retail experience in the country is predicated on the quality of its stores rather than the quantity of its locations."

Virgin said it "remains fully committed to entertainment retail and will continue to seek suitable locations in the country in which to operate Virgin Megastores that will meet both the needs of the company and its customers."

Those plans, however, are in contrast to what has happened to other retail music stores.

In December, Tower Records shuttered its stores, joining a host of smaller chains and independent stores that have closed in recent years.

Music sales continue to slide due to still-rampant piracy and consumer complaints that prices for recorded music are too high at a time when digital singles can be bought for 99 cents.

A report released earlier this month from Ipsos Insight, a Chicago market research firm, showed that while 51 percent of U.S. consumers age 12 and up bought a CD in the past 6 months, that's down roughly 15 percent from 2002.

The announcement of the Chicago store's closing came on the same day that Virgin America, another affiliate of the Virgin Group, received approval to offer domestic airline service in the U.S. That will complement the service it already to Europe aboard Virgin Atlantic

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