AND THEN THERE WERE NONE

Virgin Megastore shuttered their last two record retail locations in Union Square and Hollywood over the weekend.

In a move that inadvertently capped the week-long NARM confab in San Diego, Virgin Megastore, which had 23 locations at its peak, closed its final two U.S. outlets yesterday, including its 57k square-foot two-level New York outlet in Union Square and its location at Hollywood and Highland.

When the N.Y. store opened, most of the merchandise had already been sold, leaving two tables of CDs and DVDs, a dozen T-shirt racks and a few other scattered displays.

“Unfortunately the large retail music store is a dinosaur,” former Virgin employee Tony Beliech told the N.Y. Times. “Unfortunately, it was also a social gathering space, and that’s one thing that buying music online lacks.”

At least 2,000 independent record stores still exist around the country, according to market research firm Almighty Institute of Music Retail. Many of those indies trumpeted their recent Record Store Day at NARM, and will promote another Vinyl Saturday on June 20, featuring specially produced records by the likes of Wilco and Modest Mouse.

New York, once home to at least three large-scale music chains, now has none. Last month, Virgin shut down its other Megastore in Times Square. Fellow British chain HMV pulled out of the U.S. in 2004; Tower Records closed its 89 American stores in 2006. Trans World Entertainment, which operates FYE, has closed at least 280 of its locations over the last two years, leaving it with about 700, but none comparable in size to the Virgin Megastore.

"It’s clear that the model of the large entertainment specialist working in a large space is not going to work in the future,” said Virgin Entertainment Group N.A. chief Simon Wright.

From the industry’s peak in 2000—when some 785 million albums were sold—until the end of last year, album sales have dropped 45%, though CDs have still remained the format of choice. As recently as 2006, CDs accounted for more than 90% of album sales. Last year, that proportion dropped to 84%, and this year, it is 77%. As many as two-thirds of all album sales are made at large chains like FYE, Wal-Mart and Best Buy, according to industry estimates.