Best Buy Europe, the joint venture between US electricals giant Best Buy and Carphone Warehouse, aims to double retail revenues and operating profit by March 2013, despite the uncertain economic outlook.
The venture – which is set to shake up the electricals sector in the UK and Europe – will incur start-up costs of up to£20 million this year, growing to£30 million, and there will be capital expenditure of£40 million in the next financial year.
Best Buy will launch big-box stores of 30,000 sq ft or more in the UK from next year, backed by an integrated multichannel offer. Its arrival will be closely watched by European rivals such as Kesa and DSGi.
Carphone Warehouse will continue to evolve its eponymous store format and has opened 16 stores during the second quarter, bringing its total to 2,430. The retailer will, however, pursue a “more measured approach to opening small stores in the existing format” and will trial a format offering connectivity products such as household wireless products.
In the 13 weeks to September 27, total connections at Carphone Warehouse grew 9 per cent to£3.1 million, driven by subscription connections, which grew 21 per cent to£1.3 million.
Chief executive Charles Dunstone, said: “We are confident of building a significant and profitable big-box consumer electronics business in Europe over the coming years.”
He added: “Consumer electronics retailing should be a vibrant, interactive and service-led experience for customers and our goal is to deliver exactly this.
He said that the “immediate consumer outlook remains very uncertain”, but that “our robust balance sheet and the quality of our assets leave us well placed to ride out the downturn and emerge in an even stronger position”.
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