January 30th 2007

Entertainment UK Limited (EUK) has been appointed by Virgin Retail Limited to become responsible for the purchase of entertainment and associated products for all of its 127 stores in the UK and Republic of Ireland from June 1st 2007.

As a result of the three year agreement, EUK will undertake the purchase of Virgin’s main entertainment categories - music, DVD and games - as well as non-core products including books, calendars and MP3 players. EUK will take responsibility for physical distribution to Virgin’s retail stores no later than April 2008.

Virgin Retail’s decision to appoint EUK represents a significant vote of confidence in the wholesaler’s future plans. The news comes just two weeks after EUK announced that it was strengthening its books proposition, having agreed terms to acquire the book distributor Bertrams.

Lloyd Wigglesworth, Managing Director of EUK comments:
“We are extremely excited to be working with Virgin Retail, one of the most vibrant names on the High Street. We both believe that our combined strength will enable us to grow sales significantly and strengthen our long-term supplier relationships. Virgin will bring a high level of specialist knowledge to our existing trading expertise, making a very positive addition to our customer portfolio.”

Simon Douglas, Managing Director of Virgin Retail Ltd comments:
“We are in a very challenging entertainment market and have for some time been exploring ways to improve the efficiency of the supply chain. We found EUK to be the best in class in our sector and it will help deliver cost efficiencies, improved stock management and product availability. This will help us to achieve our objective of sustained and improved operating profit for the business, as well as offering our customers the very best value on the High Street.”