Signalling the end of an era, music chain Virgin France plans to declare insolvency and shutter its megastore on the Champs-Elysees in Paris, billed as the world’s biggest music store when it opened in 1988.

Execs were due to meet with staff reps Monday to announce the news, according to a company spokesperson. However, the gathering was formally suspended and will reconvene on Tuesday with reps of Virgin France’s majority owner Butler Capital Partners.

Virgin France posted sales of €286 million ($374.7 million) in 2011. Debt is estimated at $28.8 million.

The music, DVD and books retailer is reportedly drawing up a last-ditch plan to save some of its 26 French stores, currently employing around 1,000 staff. But it has decided to terminate its lease on its flagship Champs-Elysees site, according to press reports.

Once owned by Richard Branson, the Gallic biz was bought by French aerospace-media conglom Lagardere in 2001. Private equity firm Butler Capital Partners acquired an 80% stake from Lagardere in 2007, but has suffered losses for years.

Virgin France blames its predicament on exorbitant store rental costs, plus a long-term downturn in business.

A Virgin France spokesperson told French financial daily Les Echos that, while the Champs-Elysees site is 47,000 square feet, a store’s viable size is now 10,700 square feet.

Virgin France’ CD sales plunged 70% in a decade, DVD sales 15% in four years, she added.

It has been hit by digital competition in one of Europe’s biggest VOD markets, plus competition from much larger retail store Fnac, which itself has cut more than 300 jobs in France.