Sir Richard Branson's Virgin group has suffered a sharp downturn in the Irish market, with pretax losses in the music chain more than trebling to €2.77 million according to newly filed accounts. Arthur Beesley, Senior Business Correspondent, reports.

In a difficult period for the music industry, the rising deficit leaves the flamboyant British businessman's operation nursing accumulated losses of €9.15 million after almost 20 years in the Irish market.

Despite its difficulties, the company plans a fresh attack on the Irish market with the opening of new stores in Limerick and Dundalk "in the coming months". This follows the opening earlier this year of a big outlet in the Dundrum Town Centre in south Dublin.

Figures recently lodged in the Companies Office show that sales were static at Virgin Retail (Ireland) Ltd in the 60 weeks to March 27th, 2004. The company had a turnover of €23.48 million, only €93,000 stronger than in the 52 weeks to February 1st, 2003.

With operating losses on the rise to €2.83 million from €380,000, the loss of €2.78 million before tax followed pretax losses of €797,000 in the previous period.

While the 2003 performance appeared to herald the beginning of a recovery for the chain - Virgin had pretax losses of €1.52 million in 2002 - the losses in 2004 mark a significant reversal for the company.

Sir Richard entered the Irish market in 1986 when he opened a landmark Virgin Megastore on Aston Quay near O'Connell Bridge, Dublin.

That store closed in May 2002 and the group completed its withdrawal from central Dublin last July when it closed a store on Henry Street, its only other outlet in the city centre. It retains three stores in the west Dublin shopping centres at Liffey Valley, Tallaght and Blanchardstown.

Virgin's managing director Simon Douglas declined to comment on the figures but said the company remained committed to the Irish market.

The company's sales place it behind HMV and Golden Discs in the Irish market. The latest accounts for the British-owned chain HMV Ireland show that its annual pretax profit fell to €7.68 million in the year to April 2004 from €8.26 million while sales rose to €61.3 million from €60.47 million.

Pretax profits at Irish-owned Golden Discs rose to €858,085 in the year ended March 31st, 2004, from €819,262. Sales rose to €38.56 million from €37.4 million, its most recent accounts show.