San Francisco Virgin Megastore will close

February 25, 2009 12:00:00 AM PST
It's not just the tough economy, but the changes in the way people purchase music that's forcing the Virgin Megastore in San Francisco to shut its doors. The music giant will close its massive store in New York City as well.

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The store on Market and Stockton streets opened in 1995 and became an iconic member of San Francisco's retail show case. On Wednesday, the Virgin Megastore, near Union Square, announced it will close in late April.

"It's shocking. Man, that sucks," said Gregory Morgan, from Oakland.

About 40 people will lose their jobs in this store filled with mostly music on CDs.

"I currently own 2,500 CDs and about 3,500 LPs," said Morgan.

Morgan represents a dying breed. The NPD group, a leader in entertainment market research, says in the last year iTunes and Amazon MP3 have attracted 2.8 million additional music download customers.

"I get most of my music from iTunes by downloading it because it's easier and you don't have to leave the house or anything," says Clio Gentry, a consumer.

The most dramatic decline in CD sales has been among of teens and young adults under 35.

"For my age bracket I had to have the movies. The younger people don't need to have that tangible thing. They have it on their iPods, on their phone, it's not as important to them," says Ted Windsor, a Virgin Megastore customer.

Brick-and-mortar stores have had trouble competing with digital music for years. That problem was amplified last January, when Apple's iTunes store surpassed Wal-Mart to become the nation's top music seller. The loss of Virgin Megastore is another huge addition to San Francisco's blight.

"You will see empty store fronts, you will small businesses that have closed, you will see large retail stores that have closed. The recession has left no corner of our city untouched from a retail perspective," says San Francisco Supervisor David Chiu.

But Professor Eugene Muscat of USF believes retail music was on its way out no matter what. He's says the music is no longer the meat and potatoes of the industry.

"The music is the vehicle to bring people together, but it's the product and the product re-sales and the endorsements. That is the new music industry," says Professor Muscat.

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