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The first tickets will go on sale this week for Virgin Voyages, a Miami-based cruise operator, who wants to launch the first of four ships it will build early next year. In a few days, a group of New York banks should offer a $ 3 billion initial public offering on Virgin Trains, a new pbadenger rail service in Florida.
At the end of February, a Virgin hotel will open in San Francisco and a Virgin Galactic space plane hopes to make its second test flight from the Californian Mojave desert to the edge of space. Virgin Orbit, headquartered in Long Beach, plans to celebrate the launch of its first commercial satellite by the summer.
As he prepares to celebrate the 50th anniversary of Virgin's founding of Sir Richard Branson as a mail order business, the leader who now runs the company is laying out ambitious plans to break into a US market where the brand has been much weaker. known – and lucrative – than in the UK.
Josh Bayliss, a New Zealander trained in Slaughter and May, who rose from general council to chief executive in 2011, said he had tried to focus attention on a private group that still covers 68 companies in 34 countries.
HOTELS
The first Virgin Hotel opened in Chicago in 2016, with Branson touches like a shag room ladle, but the Miami-based management team tinkered with the model before deploying it further.
"It took a long time to get to the end of the start," concedes Josh Bayliss, but the team has now opted for a concept, offering this offer as a "home away from home," especially for women. Rooftop bars, venues for attracting local musicians, and restaurants designed to appeal to both locals and tourists alike are all part of the new formula.
The Chicago hotel is now "very profitable," says Bayliss. Other openings are planned in San Francisco, Nashville and Dallas this year, followed by a New York branch and a brand new Hard Rock Hotel & Casino in Las Vegas.
Sometimes, in Virgin's first 49 years, Virgin did not quite understand what his portfolio was, except for the whims of his founder. Mr. Bayliss says that Virgin is now "more deliberate" about where she applies her brand than when Sir Richard launched cola, vodka, cosmetics and bridal wear under the slogan "screw the, let's do it. "
"There is a misconception of Richard as someone who [just] slaps the mark, "he added, pitting Virgin against another brand-centric multinational run for years by a billionaire stuntman:" It's very different from the way the Trump Organization works. "
Virgin is also more interested in seeking financial partners with long-term investment horizons, such as sovereign wealth funds and pension funds, and in selecting industries where it is considering the possibility of setting up several companies. billions of dollars by offering a better experience to the "underserved". consumers.
The United States, as the largest consumer market in the world, has obvious appeal. But it has apparently taken a step back to finance its current lead: in 2016, Alaska Air paid $ 2.6 billion to Virgin America, the national airline that the British group had launched under a previous bid for higher incomes in the United States.
Sir Richard, with just over 30% of what was then a public company, lamented his inability to stop the sale and subsequently hinted that Alaska had "castrated" the carrier by abandoning the name. from Virgin. The transaction, however, provided Mr. Bayliss with the capital necessary to explore other opportunities for the US brand, and the imminent sale of a 31% stake in Virgin Atlantic to Air France- KLM will bring additional resources.
Virgin has invested US $ 2.3 billion since 2008 in the US, Bayliss said, mainly to Virgin America. The recent surge in investment means that Virgin is losing money in the United States, but expects a substantial return on investment over the next five years. Virgin Voyages, the cruise line backed by Bain Capital and Singapore sovereign wealth fund GIC, needed between $ 150 million and $ 200 million. It has also invested $ 75 to $ 100 million in Virgin Hotels, which has so far only opened one facility in Chicago, but plans to open nine in the next three years, from Nashville to Las Vegas. Vegas.
The Virgin's Fortress-sponsored Virgin Gear listing documents, in which Virgin will only own a 2% stake, suggest that its investment could be somewhere between $ 50 million and $ 60 million. And there are also very delayed space launches, in which Sir Richard said last year that he had poured about $ 1 billion of his own money and which, according to Mr. Bayliss, might still require "a lot more capital".
It is difficult to confirm such sums from the published accounts of the ramifications of Virgin Group Holdings, the private parent company that is registered in the British Virgin Islands with the fiscal efficiency where Sir Richard resides. However, they offer an image of a group that remains heavily reliant on the UK, 35 years after the first Virgin flight across the Atlantic.
In the latest accounts of Virgin Enterprises Limited, for example, the subsidiary that oversees the Virgin brand's high-margin licenses made £ 40 million out of a £ 73 million business turnover from the Kingdom United Kingdom in 2017 and only 7.3 million pounds in North America. amount generated in Australia and New Zealand.
These accounts note the vulnerability of companies to any decline in the perception of the Virgin brand, and the efforts of the group to attack the United States had to face the shock caused by the fatal crash of the previous test flight of Virgin Galactic in 2014.
CRUISES
The 278-meter Scarlet Lady, designed to accommodate nearly 2,800 pbadengers, left the Fincantieri shipyard in Genoa last week, ready to be fitted with interiors designed to attract a crowd that defies the stereotypes of cruising .
The first of four ships that Virgin and Bain Capital have ordered for Virgin Voyages over the next four years, will test how millennials "urban, young, and experienced" spend their time at sea. " It is a clbadic virgin territory. We really think we can make a difference, "said Bayliss, adding that Virgin Atlantic was already Europe's biggest cruise vacationer.
Virgin Travel operates a growing market: The Cruise Lines International Association forecasts a 6% growth for the sector in 2019, bringing the number of travelers to 30 million, up from 17.8 million a decade earlier. But Virgin pursues a relatively new population. Under 18s will not be allowed, notes Mr Bayliss, and "there will be no buffet".
"It was a terrible and terrible human accident," said Bayliss, who cost the company "hundreds of millions of dollars," but adds that it has also helped the team resist better. Sir Richard owns 80% of the American company, with Mubadala of Abu Dhabi the owner of the rest. The contractor therefore bore most of the estimated cost of the accident, which ranged from $ 300 million to $ 400 million.
After many delays, Mr. Bayliss will not know when the first pbadengers will be able to acquire a new perspective of our planet, but he notes that a person – a person in charge of the oil sector making weekly trips from London Heathrow to Lagos – won a free space flight by accumulating 1m airline miles on Virgin Atlantic.
Virgin and Delta Air Lines announced last year their intention to combine the British airline's Flying Club loyalty program with Virgin Red, which offers rewards to people who spend money with Virgin Media's group companies. at Virgin Balloon Flights. "Now you have not only a membership club, but a motto," said Bayliss, who sees the new program as creating more "connectivity" between the group's activities.
Mr. Bayliss could reach another goal: to find a partner for an American version of Virgin Money, the financial services brand that she operates in the UK with Clydesdale Bank, Australia with Bank of Queensland and in the South. Africa with Absa Bank.
"These are good companies to invest in. This is the kind of thing we would like to replicate in North America, "he said, missing out on a recent foray into the US peer lending system with Virgin Brand Money.
Virgin is actively exploring financial services opportunities in North America, preferring to rely on an existing current account platform to enhance the experience of customers wanting "something a little more exciting and interesting" said Mr. Bayliss. He hopes to seal an agreement with Virgin Money in the United States this year, but the group has not yet found a likely partner.
With Virgin's long-term aspirations for the United States, including radio stations and hyper-loops, the wish list is staggering, but Bayliss insists his expansion to the United States Can be consistent.
"We have a lot of skin in a lot of games, which I think are connected to each other in a sensible way," he says.
THE TRAINS
Last year, Virgin and Stagecoach were deprived of the franchise allowing them to operate train services on the UK's east coast line between London and Scotland, after breaching a financial clause. Pbadenger railways in the United States are not what they were, Bayliss says. Yet Virgin sees an opportunity for growth in a country where the car has long ruled public transport.
In November, it announced a strategic partnership with Brightline, the only US private long distance pbadenger service. At the end of the month, the group renamed Virgin Trains USA announced its intention to launch an initial public offering on Nasdaq, which could reach $ 3 billion, despite losses of $ 87 million on revenues $ 5.2 million in the first nine months of last year.
The company only began to operate trains between Miami, Fort Lauderdale and West Palm Beach last year, but plans to expand service to Orlando and Tampa to achieve sales of $ 810 million. dollars in five years. He is also studying routes like Los Angeles in Las Vegas, Dallas in Houston and Boston in Washington.
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