Our Price leaves Aussie hangover
AUSTRALIAN music and lingerie retailer Brazin is still suffering from the legacy of its purchase of the Our Price chain from Sir Richard Branson's Virgin Group.
The companies are in dispute over a £1.5m payment Brazin claims it is owed under a profit guarantee arrangement.
Problems at the stores have also been blamed by Brazin founder and chief executive Brett Blundy for the shock withdrawal of a A$91m (£37m) bid to privatise the group.
He said a 'strategic review' may result in a large number of the British shops, now called Sanity Entertainment, being closed down.
Brazin paid only £2 for the 77 Our Price stores in October 2001 in a deal which included a £7.7m commitment from Virgin to help restructure the chain, and an optional loan of £2.2m.
But the close relations between Virgin and Brazin - forged through recently-departed former Brazin chief Ian Duffell, a former Virgin executive - are now unravelling as the two groups reportedly argue over the profit-sharing guarantee.
Brazin draws 35% of its revenue from Britain. The Brazin- Virgin alliance is still active in Australia, where Brazin has an agreement to rebrand one of its chains as Virgin stores and pay Virgin 1% of the turnover.
