Print 19 comment(s) - last by Wurum.. on Nov 8 at 5:00 PM

Best Buy purchases Carphone Warehouse portion of Best Buy Mobile U.S. operations

The consumer electronics market is still feeling the pinch of the poor global economy. Best Buy was able to help put Circuit City out of business in the U.S. a few years ago, but it is now facing its own mortality in the United Kingdom. The Best Buy UK stores were a joint venture with Best Buy and Carphone Warehouse. Carphone Warehouse is a seller of mobile phones and other devices in the UK.
Best Buy UK stores are being shut down because the business continues to lose money. The losses before tax and interest in the six months that ended on September 30 amount to £46.7 million, almost twice the £28.8 million loss the previous year.
Interestingly, customers found the stores very appealing and gave Best Buy UK locations high marks for customer service.
Carphone Warehouse Group CEO Roger Taylor said, “The eleven Best Buy UK ‘Big Box’ stores have performed exceptionally at the level of customer satisfaction, but they do not have the national reach to achieve scale and brand economies. Due to the lack of visibility of an acceptable rate of return on historical and future potential investment, we have decided against rolling out more ‘Big Box’ stores and we will be closing our existing stores, subject to consultation with our employees.”
The first of the Best Buy UK stores was in Thurrock, Essex and opened in May of 2010. Carphone Warehouse will now expand the Wireless World stores to offer more products with a new range of connected devices. Best Buy has also announced that it will be purchasing the Carphone Warehouse holdings in the U.S. mobile phone joint venture. The purchase of the Carphone Warehouse portion of that venture will cost Best Buy $1.3 billion.
Analyst Anthony Chukjumba from BB&T Capital Markets said, "For Best Buy to be able to no longer have to share 50 percent of the profits of a high-margin, fast-growing business with Carphone Warehouse, from my perspective, is a real positive. (But) it is not a game-changer. Best Buy still has the same challenges they did 24 hours ago -- fairly weak product cycle particularly in flat-panel TVs, increasing competition from Amazon, probably too much retail square footage."

Sources: Reuters, internet Retailing

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: best buy is never the best buy
By Bizarro on 11/7/2011 1:14:01 PM , Rating: 0
As long as Best Buy has their financing deals, I will ALWAYS buy anything over $500 from them. 0% for 18-36 months makes a new TV, stereo, console, dish washer, etc. very easy to swallow. I've never seen a webstore offer anything more than 6mo.

RE: best buy is never the best buy
By MrBlastman on 11/7/2011 2:23:21 PM , Rating: 4
That financing can quickly add up to be a lot of weight hanging over your head.

By Labotomizer on 11/7/2011 4:58:01 PM , Rating: 2
Not if you're smart going into it and make sure you pay it off on time or keep up with your monthly payments. The problem is when you don't do that. But 0% interest is pretty awesome if you're responsible and have stable employment. That last one is probably the biggest factor.

RE: best buy is never the best buy
By Paj on 11/8/2011 7:30:28 AM , Rating: 2
You know that you actually end up paying more, right?

By tastyratz on 11/8/2011 1:39:52 PM , Rating: 2
I believe the term you were looking for was bend over, not swallow.
If you do the math out on a $500 tv paid out over 2 years at 12% interest: it only works out to $564. But a $500 tv online will probably be 6 or 700 at best buy, so you were better off charging it to a credit card.
Or just ya know, living within your means. It shouldn't take you 3 years to come up with the money for anything you buy at best buy, but if it does you should seriously relook your spending.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki