Virgin to Close its New York Megastores?

Despite recent announcements that the chain had seen growth in the last year, reports now indicate that the two Virgin Megatore's in New York will be closing during the first quarter of 2009. Two separate reports informed a Billboard article about the rumored closings, from the two realty firms that jointly own the retail chain: Vornado Realty Trust and The Related Companies L.P. The two companies own 49% and 51% of the chain, respectively and made the joint purchase last September.

Vornado's executive Vice President Sandeep Mathrani told Reuters that the company "bought the Virgin business to wind it down to get a hold of the real estate." In regard to the Times Square location, Billboard reports Mathrani noted the retail chain "pays $54 a square-foot when the market rent in the area is about $700." The real estate company apparently has a "dim view on retail" due to executive thought about the retail sector and the state of the economy. But Billboard states these kinds of remarks come a month after the chain reported 11.5% national growth and 10% growth in New York alone.

Link.