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Virgin Megastores’ six remaining retail stores will close by this summer, individuals inside the company told TheWrap on Monday, signaling the end to a once-dominant consumer retail behemoth.

Virgin Entertainment Group CEO Simon Wright confirmed the news to TheWrap by the afternoon. "It's sad news, but it has nothing to do with the stores. In this economy, we can't justify the other stores to replace the Times Square store."

The Times Square store made the bulk of Virgin's profit, and VEG decided to close that flagship in April, they recently announced.

Brick-and-mortar music retailers across the country have been fighting a losing battle with Internet sales. Tower Records declared bankruptcy last year. Apple iTunes surpassed Wal-Mart as the biggest music retailer in the United States in April.

But for three decades the Virgin Megastores founded by Richard Branson were   a particularly splashy symbol of pop culture.  

Branson opened his first record shop on London's Oxford Street in the early 1970s, and the first megastore at the end of Oxford Street in 1979. Branson now owns around 200 companies in over 30 countries. He could not be reached for comment.

Wright announced the mass closures to employees at Virgin’s corporate offices in Los Angeles late Friday. Roughly 100 corporate employees will be laid off and hundreds of Megastore retail workers will be out of a job by the summer.

The megastores in New York’s Union Square and San Francisco will also close in April. No date has been set to close the remaining stores in Hollywood, Denver and Orlando. Virgin Entertainment Group North America will most likely be liquidated by the summer.

Virgin Megastores’ music sales had been in decline for several years. In August 2007 two real estate companies – the Related Cos. and Vornado Realty Trust -- bought the company from Richard Branson. The chain, once a looming presence on the American pop culture scene, boasted 11 stores when it was acquired but now operates only six.

The company is privately held and does not release revenue figures.

 Wright said VEG’s new owners were more interested in real estate rather than the retail business. “Their attraction was about real estate. In an ideal world it would have been possible to both have that real estate and develop the business along a different strand. But the economy has cut off that option,” he said.

The rent for Virgin’s Times Square store was $54/sq foot, while market prices put prime space in that area at closer to $700/sq foot. The 60,000 sq/foot space will be converted into a Forever 21 store.

VEG had been combating slow music sales by adding more “lifestyle” products such as apparel and books. Wright said apparel sales were up 20% over the holiday season, but music sales were “disastrous,” and DVDs and games were not far behind.

Jerry Suarez, former music merchandise manager for VEG and now regional sales director for Island Def Jam Music Group, said the closure of the Megastores is a huge loss for consumers and the music industry.

“Virgin Times Square had become an icon. All of the big high-profile events would launch at Virgin. If you wanted to launch something big, Virgin Times Square was the location.”

“It’s bad for all labels. But like everything else, we’ll find other avenues to sell product.”

But Suarez is optimistic about the fate of physical record stores. “I think there’s still a large business to be had in the physical space. Everybody is very quick to end it, especially in the press. For years, everybody has predicted the date of the end of the physical CD, and yet today we’re still selling CDs,” he noted.

“It’s just a real shame that there will no longer be a Virgin Megastore.”