Branson set to barnstorm New York

The Virgin chief talks to Edward Helmore about his ambitious US expansion plans

Richard Branson's plans to establish Virgin as a major brand name in the US will get an aggressive push next week as he opens what is billed as "the world's largest music and entertainment store" in New York's Times Square.

The 75,000 sq ft, three-level Megastore will be fronted by Virgin signs that rival Coca-Cola's nearby - a consciousness-raising ploy to prepare the American public for the launch of Virgin Cola and vodka in the US later this year and to help promote Virgin Atlantic, which is soon to increase its London-New York flights from three to four a day.

On a promotion tour of the US last week, Mr Branson said: "We have a fairly major presence in New York with our airline already, but we have decided that wherever we fly we will have a Virgin Megastore in that city. Obviously Times Square has a high profile, which will help our other companies as well."

The Virgin Retail Group already operates five stores on the US West Coast and, in addition to the Times Square site, has plans to open two more in Manhattan, one with a 30-screen cinema. There are also plans for stores in Denver, Orlando and Seattle.

The official strategy for winning the dollars of the world's largest leisure economy is much the same as that which established Virgin in Britain - to provide what the customer wants at an affordable price. Even more effective may be the hyping of Mr Branson himself as personification of the Virgin brand.

With one million records in stock, 1,000 listening booths and separate floors for films, books and multimedia products, the Times Square store cost $15m.

Mr Branson hopes it will become a tourist attraction. "We have tried to create an environment where people will come to marvel and hang out as much as to buy, just as the Virgin Megastore in Paris has become France's number one tourist attraction," he said.

However, Mr Branson is launching his brand of "entertainment retail complex" at a time when existing music sellers here are suffering from reduced overall demand and increased competition from discount stores. Last year, the total number of CDs, cassettes and videos shipped from manufacturers to retailers in the US dipped by 1 per cent to 1.11 billion.

"Although, generally, small is beautiful, we found that the public want large stores where they can find any record on any label they want," he said, adding that the weakness of existing chainstores, and therefore Virgin's opportunity, is their depressed and impersonal nature - "If you go into the stores in New York I'll pay you a dollar if you can find anyone there who smiles and another if anybody can be helpful."

The launch party on Tuesday, which also marks the 25th anniversary of Virgin's first store in London and at which Mr Branson has promised to make a spectacular entrance, will be accompanied by a $1m advertising blitz with the irreverent tone that has become Virgin's trademark.

One television commercial shows the Virgin sign atop the Acropolis and the Eiffel Tower with the punchline: "After much deliberation, we decided on 45th and Broadway."

Plans for further expansion in the US include a marketing test of Virgin Cola in Philadelphia with a view to launching nationwide later this year. Branson expects the brand to take longer to establish in the US than in the UK. "In America I doubt that we will overtake Coca-Cola in my lifetime but hopefully in my children's lifetime we can knock it into second."

He also plans to open multi-screen cinemas and concept restaurants next to future Megastores.