Following in the footsteps of HMV in the UK, Virgin France declared insolvency and is set to close 26 stores in France, including its flagship store on Paris' Champs-Elysées boulevard that accounts for 20% of the chain's turnover. The company has reported debts of €22 million on a turnover, in 2011, of €286 million.

Declining sales, increasing levels of debt, and high commercial rental rates seem to have sealed the high-street chain's fate, majority owned by French investment firm Butler Capital who acquired it from the Lagardère group in 2008.

Virgin has already withdrawn its Megastore brand from nearly all other European territories (it closed down in the UK in 2008), though a number continue to operate in the Gulf countries. It has a workforce of 1,000 employees.

"Virgin has maintained its store presence in France since entering the market in 1984, despite the closure or sale of the chains in other European countries, a testament to its popularity with French consumers," comments Thomas Nash, an analyst with IHS Screen Digest. "The closure mark the end of an organisation which has long been engrained into the country's cultural make-up. Indeed, talks are currently underway with the French Minister for Culture, Aurélie Filippetti, to discuss possible exit plans. Though the intervention of government has caused a predictable political backlash; France's parliamentary opposition has cited "disloyal competition" from giant online retailers."

The closure coincides with rival retailer FNAC withdrawing from Italy, selling its eight stores to private investment firm Orlando Italy.

Story filed 24.01.13