Electricals group Best Buy is to close its big boxes in the UK and partner Carphone Warehouse’s will instead focus on developing its ‘connected world’ store model.
Carphone has also sold its interest in Best Buy Mobile US and Canada for £838m in cash, created a global partnership with Best Buy to take advantage of ‘“connectivity” opportunites around the world, and Best Buy has been granted call options over Best Buy Europe to “formalise the long-term ownership structure of our long-term interests”.
Best Buy Europe, a partnership between the US giant and Carphone Warehouse, said that since 2008, the trading environment in consumer electronics has “changed substantially” because of economic conditions, the development of online retail and the growth of product categories such as smartphones, tablets and apps.
Best Buy Europe chief executive Andrew Harrison 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.We are confident we will best serve our customers by investing in a single brand and format rather than two.”
“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.”
Carphone Warehouse also brought forward its interim results. The Carphone Warehouse Europe business made a headline EBIT of £20m versus £44.2m last time and like-for-like sales fell 3.9%. Best Buy UK, the big-box business, lost £46.7m at EBIT level compared to £28.8m last time