Print 6 comment(s) - last by Apone.. on May 2 at 12:46 PM

It will be sold to its partner Carphone Warehouse

Best Buy UK announced today that it will sell its entire stake in the Best Buy Europe joint venture.

Best Buy UK said it will sell its 50 percent stake in the Best Buy Europe joint venture with Carphone Warehouse. This equates to about £500 million ($775 million USD), which will be sold to Carphone Warehouse.

However, Best Buy UK will have to pay Carphone Warehouse £29 million ($45 million USD) in agreement termination fees. 

"After reviewing the business and spending time with our partners, we concluded that the timing and economics were right to enter into this agreement with CPW," said Hubert Joly, president and chief executive officer of Best Buy. "This transaction allows us to 1) simplify our business; 2) substantially improve our Return on Invested Capital, one of the five pillars of our Renew Blue transformation; and 3) strengthen our balance sheet.

"Each international market is different and the sale of our European operations should not suggest any similar action in our other international businesses."

Shareholders still have to approve this deal. They are expected to do so by the end of June 2013. 

Best Buy Europe's first store opened in May 2010, with about 11 stores launching across the UK. However, things started looking grim as the two companies decided to close the retail partnership just one year later due to an unprofitable year. 

Now, it has been over a year since Best Buy shut down its retail stores throughout the UK. 

Best Buy hasn't had a lot of luck in the U.S. lately, either. It has axed thousands of jobs over the past year alone, and even had to find a new CEO after a scandal arose concerning former CEO Brian Dunn's relationship with a female employee from the board.

Best Buy founder Richard Schulze even tried to take the company private last summer, and considered selling his 20 percent stake in the company as just one option.

Source: Best Buy

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By Apone on 5/2/2013 12:46:22 PM , Rating: 2
I don't know that it was ever a "great" company.

I worked there part time back in college (pre-Geek Squad); it was actually decent. The company prided itself on its "non-commission" statement, offered a generous bonus for all employees for a favorable annual inventory audit, and the employees back then weren't clueless on the technology and products they were selling. However, that's all changed considering what I see now when I walk in to a Best Buy. While they managed to rule the B&M business for many years, they ultimately failed to adapt to the changing environment, hence becoming a Blockbuster collapse/Netflix ascension episode all over again.

But, times have changed...and the internet happened. Now one wonders how B&M retail is going to survive. And it sure as hell isn't going to be by swarming your customers with sales people like what happens in BBY now.

I remember back in 2000, Best Buy launched its E-commerce store which featured online purchase/in-store pick-up as a selling point. However, they failed to spank up & coming stores like Newegg, TigerDirect, and as its E-commerce store was buggy, had online/B&M inventory synchronization issues, and wasn't marketed enough to inform regular Best Buy customers who were accustomed to making the trip to their local store. I agree, the future of B&M retail seems gloomy...

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