Best Buy to close in UK and buy Carphone Warehouse out of mobile venture
Best Buy has today announced that it will close in the UK to focus its capital investment and ‘connectivity’ strategy.
As suggested in The Drum over a month ago, Best Buy's 11 "big box" stores will close by the end of 2011 after it made losses of £46.7 million in the six months to September, which could lead to over 1,000 job losses.
Andrew Harrison, CEO of Best Buy Europe, said: “After conducting a thorough strategic review of our operations, we believe that our capital investment and ‘connectivity’ strategy should be prioritised within our Carphone Warehouse stores as they offer a higher and proven rate of return. The technology world has changed substantially since 2008 and we are confident we will best serve our customers by investing in a single brand and format rather than two.
“We are very proud of our Best Buy team members. They have been exceptionally committed and have delivered fantastic customer service. Our immediate focus is on ensuring that they are offered new opportunities within Carphone Warehouse and Geek Squad, where they will help us deliver a best-in-class customer experience.
“We have within Carphone Warehouse a proven way of meeting customers’ emerging needs around connectivity. We will now concentrate on evolving our store development and building the complementary multi-channel capabilities to fuel our continued growth.”
Despite the Best Buy website indicating that it would focus on smaller Carphone Warehouse stores, the retail giant is buying its British partner out of the mobile phone joint venture for $1.3 billion (£838 million).
Best Buy said taking full control of Best Buy Mobile and closing British megastores would add 35-40 cents to fiscal 2013 earnings, adding the one-off cost of both actions, plus a non-cash impairment to write down goodwill, was $2.6 billion.