USA: Virgin's chaste union with Blockbuster.

USA: Virgin's chaste union with Blockbuster. - Many a British retailer with international aspirations has been led astray by the allure of a cross-border venture. And nowhere more so, as the experience of Storehouse, Marks and Spencer et al amply demonst

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Last Updated: 31 Aug 2010

Many a British retailer with international aspirations has been led astray by the allure of a cross-border venture. And nowhere more so, as the experience of Storehouse, Marks and Spencer et al amply demonstrates, than in the States. Besides ignoring the trend, the recent link-up of Virgin's music retailing arm with US video rental giant Blockbuster to open a string of "megastores" appears auspicious on all counts.

Under the terms of the deal, Virgin Retail receives "tens of millions of pounds" and a swift entree, via Blockbuster's local knowledge, to the lucrative US market. It also has sole operational and management control of the stores. Blockbuster, on the other hand, one of the fastest growing retailers in the US, receives a 75% equity stake and adds further momentum to its diversification into music retailing. So far on paper, so good. Yet a pairing that seems to make perfect business sense is something of an oddity in cultural terms.

Blockbuster, you see, is a bit of a square, a bit - how do they say - "uncool". Its claim to be "America's Family Video Store" is not just a marketing slogan but an entire philosophy of wholesomeness vigorously applied to stock and staff alike. Contrary to many of its less salubrious high street competitors, for example, it stocks no videos of a pornographic or extremely violent nature. More controversially, it subjects all its job applicants in the US to a drug test. "Employing people who use drugs does not fit with the practice or image of running a family video store. It's a matter of protecting our customers," says a spokeswoman for the company.

Virgin, on the other hand, is notoriously laid back. It operates a no censorship policy in its music stores and, in its earlier incarnation, displayed some distinctly bohemian tendencies - not at all, in fact, the innocent that its name might suggest. Chairman Richard Branson's authorised biography, for instance, recalls Simon Draper, until recently head of the UK music division, spending the early days at Virgin "in a marijuana haze" - until, that is, the need to carry out a business conversation coherently forced him to desist. Elsewhere the book invokes the atmosphere of the first store in Oxford Street - "To shop at Virgin was an experience rich with the ambience, and often the aroma, of an evening relaxing over Red Lebanese or Afghan Black in one's 'pad'." All this, of course, is history to the now virtuous Virgin - but not, all the same, without a certain irony.

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