sir richard branson

Virgin brand remains resilient
Article from: Herald Sun

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Sir Richard Branson

June 14, 2008 12:00am

I AM writing in response to your article in the Herald Sun on Saturday June 7 regarding the Virgin brand. I have always appreciated the media and what they have done for me in promoting the brand, so I wanted to present a fairer assessment of how the brand is holding up in the current challenging market.

Virgin Money Australia has been impacted by the global credit crunch, as have many of the world's financial institutions, but Virgin and its partner Macquarie Bank are still committed to the business.

There is no need to inject more equity, as the business still has more than $20 million of funding available.

We remain poised to launch multiple new products when the markets are right.

On Virgin Blue, I trust you have seen the retraction made by JP Morgan regarding the financial position of the airline.

I am sure you will see further announcements from Blue on how it plans to deal with the issues facing the global airline industry.

I believe some of the latest initiatives from Virgin Blue, including its new premium economy product, fabulous lounges, combined with wonderful customer service, will continue to bring it success.

Virgin Atlantic is also expanding and has just announced a new double-daily service from Hong Kong to London.

We have needed to add extra capacity on that route to deal with the demand both from Sydney and also London.

A major challenge has often being getting a seat all the way from Sydney to London - so this extra capacity will help what is already a profitable route.

The rest of our group is proving resilient. Virgin Active has continued to grow strongly and is now the third largest health club chain in the world with almost one million customers across its 169 clubs.

Recent results for 2007 showed profits up by 28 per cent to $78.2 million on the back of its eighth consecutive year of growth.

Our Virgin Money business in the UK is having its strongest year to date. We continue to look actively at the banking sector and plan to continue to expand this business.

Virgin Money US launched last year with peer-to-peer lending and we have since launched a student loan business and are actively looking at the mortgage business.

Virgin Mobile US performance has stabilised and the business generates strong cash flow with more than five million customers.

We also have very solidly performing businesses in both Canada and France.

In terms of growth we certainly have no plans of slowing down. In the last year we have launched a number of new businesses including Virgin America, Virgin Mobile India, Virgin Radio in Dubai and France and have just launched Virgin Connect, our first business in Russia.

We have also invested in a number of non-branded ventures including AirAsia X.

I was also pleased to see a recent research report showing that the Virgin brand continues to be in the top 10 of the most admired brands in Australia.

The global economy may be experiencing tougher times but we have an experienced team and remain confident of the success of our group and brand.

* Sir Richard Branson is chairman of Virgin Group.