Carphone Warehouse is to open four or five electronic megastores in the UK as part of a joint venture with the US consumer electronics giant Best Buy. The group said that the current economic downturn was “the best time” to launch.
However, Best Buy sounded a note of caution, saying that the group would “temper” the rollout in line with the slowdown in consumer spending. “It’s not a race” said Bob Willett, Best Buy’s international chief executive. Around 100 stores are planned for launch throughout Europe in the next five years, with the group hoping to grab 10 per cent of the European retail electronics market ‘over time’.
Carphone Warehouse and Best Buy said in a trading update that they would jointly spend £20 million on the launches in the current financial year to March, with another £30 million earmarked for the following year alongside £40 million in capital spending. The joint retail arm, branded Best Buy Europe, predicts revenues of around £6.2 billion and underlying earnings of £3.5 million by March 2013.
Best Buy bought half of Carphone Warehouse’s retail business, encompassing 2,430 stores in Europe and the US, for £1.1 billion in May. Plans had originally been set to launch the new stores in spring 2009 or the end of 2008. They have now been pushed back 6 months to summer 2009.
The new Best Buy stores will go head-to-head with PC World and Currys group DSG International as well as Kesa Electrical’s Comet stores, selling both white goods and consumer electronics. DSG is opening its own megastores tomorrow.
Carphone Warehouse also reviewed its trading across the group, pointing to the continued slowdown in fixed-line broadband business amid the housing market downturn. Altogether the number of new broadband customers plunged by more than half year-on-year to 41,000 in the three months to September 27. Carphone Warehouse owns the fixed-line ISPs TalkTalk and AOL.
Posted by Ellie on October 15th 2008 in AOL, Broadband, Carphone Warehouse, TalkTalk
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