Veg's New Concept For Our Price

The Virgin Entertainment Group's (VEG) 20 million pound ($35 million) makeover of its under-achieving 229-shop Our Price music retail chain gets under way Sept. 4, when the first five stores open under the new v.shop banner.

A total of 102 Our Price stores in the U.K., mainly in the southeast of England, will be converted to v.shops by mid-November at the rate of 12-25 each week, says Our Price commercial director Neil Boote. He describes v.shop as "a brand-new retailing concept for Virgin."

Partly because of uncertainty about Our Price's future—prospects of a long-awaited management buyout fell through earlier this year—Boote notes that "there has been no real investment in the vast majority of [Our Price] stores for a long, long time. Environmentally, they're a long way away from where we'd like to be." He adds, "I'm sure Virgin believes that, if the v.shop concept works, it has to have international potential. Frankly, Our Price was just too parochial a brand, with no [particularly unique selling points]. It epitomized the High Street [prime local shopping area] record store of the '80s."

Boote reports to Our Price managing director Chris Ash, who in turn reports to VEG CEO Simon Wright. For the foreseeable future, Boote says, Our Price will continue to trade within VEG as Our Price and v.shop. "You'll still have 120 stores trading as Our Price," he claims. However, he says that "there are almost 30 of those which we are actively marketing and would like to dispose of. They're stores which were acquired at high rents or are in locations where the pitch of the shopping has moved away."

Structurally, Boote insists that "Nothing significant is going to change between now and the new year. Once we've reviewed the performance of the first 100 v.shops and we're clear about what's going to happen next, then I think we're going to have to look at the structure."

The new stores will carry a revised product split, with increased attention paid to mobile phones and portable music hardware. "Inevitably," says Boote, "by putting in the hardware and building up the phone business, there's less space dedicated to music overall, so we've probably gone from 85% [floor space for] music down to 60%. But within that mix, the focus on chart, new product, and singles is actually higher than before."

Boote says the v.stores will carry chart and new release music titles, plus a price-promoted range of catalog items—around 600 titles. (There will be no A-Z library of catalog titles.) They will also have "a big focus on DVD," he adds. Our Price stores already stock Virgin mobile phones, which Boote describes as a "significant business for us," and about 25% of floor space will now be dedicated to phones.

"Although it will be a similar product offer to what we've got now on phones," Boote continues, "there will be a massive staff change in terms of service levels. We're retraining every single member of staff for four weeks during the six weeks when each store is closed." The final element of the revised product range will be consumer electronics hardware—portable music playing devices including MP3 players, MiniDisc players, and personal CD players.

Each store will include an area designated as 'Find And Buy' (F.A.B.), with kiosks that, using a simple touch-screen system, offer shoppers access to roughly 100,000 music and DVD titles, with the promise of next-day home delivery. A similar service is offered for a recommended range of hardware, says Boote.

One kiosk—Boote envisages there being around five in each store—will link to downloads site peoplesound.com, which offers access to unsigned acts. That is "effectively a demo post," he says, "where you can find out about digital music and also download some tracks from peoplesound and listen to them—licensed free music."

In addition, there will be in-store