San Francisco - Signaling a fightback against the growing threat of online music, Richard Branson, the head of the Virgin chain of companies, has unveiled a new megastore in San Francisco, where sex toys, clothes and electronics feature almost as prominently as CDs and DVDs.

"Unless you invest and evolve, you die," said Branson at the store opening, according to the San Francisco Chronicle Thursday.

Customers entering the refurbished store in the trendy Californian city now see an array of clothing racks, rows of 70

dollar Hello Kitty backpacks, a pair of motorcycles on the second floor and an electronics section packed with MP3 music players and mobile phones.

Of course there are expanded sections for DVDs and CDs, including an innovative system that lets users listen to 30-second clips of any album by scanning the bar code. They can also download clips onto their own memory cards at specially designed stations.

According to Branson, the move is designed to diversify the store away from its core music offerings which currently provide over 60 per cent of their revenues. Industrywide in-store music sales have dropped over 3 per cent during the last few years, forcing many of Virgin's competitors to close their doors. Branson says the San Francisco model will soon spread to other Virgin Megastores in America and around the world.

"We used to be the best music store in town - the best range of music. But music has declined," said the flamboyant Branson. "What we realized was it's because young people of this generation, they're spending money on mobile phones. They're spending money on clothes. They're spending money on electronics. ... Quite a few items which the previous generation, they weren't doing. They were just buying music."

Phil Leigh, a senior industry analyst, was skeptical of Branson's efforts saying there was nothing he could do to stop the gradual transition of the music industry online.

"In 10 years, music stores may end up looking more like a youth oriented, music-focused Starbucks than a CD record store," Leigh said. - Sapa-DPA