Virgin Entertainment Group has sold its U.S. Virgin Megastores retail division to Related Companies, a large national real estate development firm.  The deal is expected to close in September.  Related says it has put continuing employment contracts in place with senior management, and 'expects to continue to make key investments into the company.'

Virgin Megastores operates 11 stores that sell music, books (including graphic novels), DVDs, and other pop culture items.  Virgin says that its Times Square store is the largest store of its type in the world, with annual sales over $50 million, a truly 'mega' number.  Comparable store sales for the chain were up around 15% in its most recent quarter, according to the company, in a generally down environment for music retailers. 

The chain's recent successes represent a turnaround from earlier troubles.  It recently closed its Chicago and Salt Lake City stores.  According to a report in Video Business last month, the lease on the chain's West Hollywood, California store is up in January and management has not yet decided whether to renew.

The New York Post reported that Related is Virgin's landlord for one of its New York stores, and that the lease is below market, leading to speculation that the store would be eliminated to allow a higher-paying tenant to come in.  But with the two New York stores selling almost $100 million a year between them, it's likely that space can be found for the stores to operate.