France's Virgin Megastore announces that it plans to declare itself insolvent whilst uncertainty remains over the future of its 1,000 employees.
PARIS, FRANCE (JANUARY 4, 2013) (REUTERS) - France's Virgin Megastore announced on Friday (January 4) that it intended to declare itself insolvent faced with a global slump in the DVD and CD market as consumers download more film and music online.
The retailer currently employs 1,000 people and operates 26 Virgin-branded stores inFrance, including a flagship operation on the Champs Elysees avenue in Paris.
The future is now uncertain for the chain's staff and SUD Union representative Jean-Damien Bastid told reporters that people had not previously realised the gravity of the situation.
"Perhaps they thought that it was just the Champs (Elysees branch) that was affected. But we knew that it wasn't just the Champs (Elysees branch). If the Champs (Elysees branch) closes, everything closes," he said.
Bastid added that finding a buyer was an option to save viable small branches.
The plan comes as high-street woes intensify in the euro zone's second-biggest economy, where the jobless rate is at a 13-year high and where shoppers are reining in spending.
Virgin Megastore France will unveil a plan to file for payments suspension at a meeting of staff representatives on January 7, a spokeswoman said. The unit has been in the red over the last four years and piled up an estimated debt of 22 million euros.
Workers at the flagship Champs Elysees store, which opened in 1988, went on strike on December 29 to protest against plans by management to terminate the lease at the high-profile premise.