New York City Vornado Realty Trust plans to close the Times Square Virgin Megastore in Manhattan’s Times Square in the first quarter of 2009, according to Reuters.
Vornado and the Related Cos., also a real estate company, formed a joint venture to acquire the 10-unit Virgin Entertainment Group North America in September 2007. Vornado owns 49% of Virgin, while Related owns 51%.
The Reuters report cited Sandeep Mathrani, Vornado's executive VP and head of its Retail Real Estate Division.
"We bought the Virgin business to wind it down to get a hold of the real estate," Mathrani said.
Virgin pays only a $54 per square foot when the market rent in there is about $700, according to Mathrani.
In May, Virgin Megastores reported having had one of its most successful years ever. The company said same-store sales had risen 11.5% nationally in fiscal 2007. It attributed the growth to its shift to a lifestyle enteretainment shopping destination rather than solely a music retailer.