EUK has been awarded a three-year contract to buy VRL's core entertainment categories, including music, DVD, games and books, starting from June 1. VRL operates 127 outlets in the UK and Republic of Ireland.
Key VRL personnel will be transferred to EUK on a phased basis. EUK will take responsibility for distribution to VRL's retail stores no later than April 2008.
EUK will cease to supply Tesco with music, DVDs and games this year. Since the end of the Tesco deal was announced in January last year, EUK has sought to restore sales volumes and diversify its business by increasing its customer base and moving into new markets.
The acquisition of THE Distribution in September and the purchase of book wholesaler Bertram Group this month will deliver additional turnover in excess of£400 million.
Woolworths group chief executive Trevor Bish-Jones said: 'EUK is extremely excited to be working with Virgin, one of the strongest brands in the world and one of the most vibrant names on the high street. The new contract strengthens EUK and is another important milestone in the development of the business.'
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