French court cuts Virgin's fines for Sunday trading: Branson considers closing doors pending negotiations

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THE PARIS appeals court yesterday slashed a penalty imposed on Virgin's record and book store in the French capital for Sunday trading. The court cut an earlier Fr4m ( pounds 450,000) fine to Fr1m for every Sunday the British firm opens its Virgin Megastore on the Champs-Elysees.

Richard Branson, Virgin's chief executive, said that, although no decision had yet been taken on whether the store would open tomorrow in defiance of the court, Virgin would consider closing for a few Sundays if this would help cool the atmosphere while a permanent solution was negotiated. 'We are obviously pleased that the fine has been reduced,' he said.

Its Sunday opening became illegal last month after a one-year permit from the previous Socialist government expired. Virgin had been ordered to pay a Fr250,000 fine for every Sunday it opened in Paris last month but the penalty was increased this week. The money from the fine would be split between the CFDT and CGT trade unions, which brought the action.

The original justification for letting the store open was that it was selling cultural goods in a prime tourist location. Jacques Toubon, the Gaullist culture minister, said on Thursday that he supported Virgin's campaign.

The affair has received wide coverage in the French media, with Le Monde devoting a page to Virgin, Mr Branson and the whole issue of Sunday trading yesterday. With headlines such as 'Richard Branson or the art of selling yourself', the newspaper, already indignant about the social issues raised, lost little opportunity to dig at a symbol of Anglo-Saxon enterprise culture.

Mr Branson said that soundings with the new conservative French government before the court action had been encouraging. He said ministers had said Virgin could probably continue to open on Sundays 'as long as we came up with a sensible plan'. Virgin then proposed to build up to a chain of 30 shops from its current four, creating about 1,000 new jobs, he said. Virgin said it would not proceed with French expansion if it lost the Sunday battle.

As for the immediate future, 'we are trying to judge whether, if we closed for two or three weeks, we would have a better chance.' Mr Branson said a final decision on opening tomorrow would be announced today.

Virgin put full-page advertisements in French dailies yesterday promising to fight 'to the end' against trading laws dating from 'another time when records and video did not exist'.

Mr Branson said Sundays for the Virgin Megastore were 'practically the most popular day of the week' with 30,000-40,000 people visiting on average each Sunday. 'One or two French ministers have admitted that that's the only day they can go there,' he said. Closing the store permanently on Sundays would bring the loss of about 30 jobs, he added.