Virgin chief unveils new profit plan; Simon Douglas' 'Red To Black' plan to take retail chain 'back in the black within two years'.(Retail)

Virgin Megastores managing director Simon Douglas used his company's first conference overseas to set out his vision to take the UK chain back into profit within two years.

Under a theme of "Red To Black", Douglas outlined to the retailer's head office staff and store managers in the sunshine of Malaga, Spain, last week how he aimed to reinvigorate the business through a combination of improved stores and better marketing. He is targeting a return to profit by Christmas 2007.

The conference theme continued the "back-to-basics" approach which has been adopted by the former HMV operations director since he joined Virgin in September 2004. In these first 20 months with the company, he has primarily focused on addressing what he found were fundamental problems with the way the business was being run.

"We've done a lot of things over the past two to three years, driving down our costs, improving our stores," he says. "We've reviewed our portfolio, which has seen a lot of stores closing, most of them Our Price and V Shops. We've re-invested in our stores again as it's fair to say there hadn't been much investment for a long time."

Douglas has also addressed such basic problems as stores not having stock available or too much of some product or stock sited in-store in the wrong place. "Availability is a major issue," he says.

Under Douglas, the chain has started to address common complaints by customers uncovered in internal research that they cannot find what they are looking for in-store or there is not a knowledgeable member of staff around to ask.

There are already signs Douglas' approach is having a positive effect on a business which, in the past decade, has found itself slipping further and further behind rival specialist HMV in both store numbers and market share across music, DVD and games. Figures made available at the conference suggest that, in ...