Monday 8 March 2021 10:03 am

Richard Branson sues train partner for £180m in Virgin brand dispute

Sir Richard Branson is suing a former US partner for $250m (£180m) over its decision to drop the Virgin name from its trains due to a perceived decline in brand value.

Virgin and Brightline inked a 20-year licensing deal in 2018 that allowed the American company to rebrand trains on its service as Virgin Trains USA.

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But Brightline abruptly withdrew from the agreement in July last year, arguing that Virgin’s brand was no longer of “high-quality status” and continuing to use it would cause reputational damage.

Virgin Enterprises, which controls Branson’s brand, described the accusation as “spurious and cynical” and argued that it is still a brand of “international high repute”.

It is suing its former partner for $251m, which it says will cover lost royalties and an early termination fee.

Brightline, which is owned by investment management firm Fortress, operates a train line between Miami and West Palm Beach in Florida.

It is also planning a new service between Las Vegas and southern California.

The firm’s service was suspended in March last year due to the outbreak of Covid-19, but is due to resume at some point in 2021.

The dispute comes after a torrid year for Virgin, which has seen much of its empire grind to a halt as a result of travel restrictions due to the pandemic.

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Virgin Atlantic has cut almost 5,000 jobs — nearly half its pre-pandemic workforce — as part of a £1.2bn rescue plan.

The group also suffered from gym and hotel closures and was forced to delay the launch of its first cruise ship.