Best Buy will buy Carphone Warehouse's 50 percent stake in their U.S. and Canadian Best Buy Mobile venture for $1.3 billion. Best Buy will also reorganize its retailing efforts in Europe. At the same time, Best Buy said it and Carphone Warehouse will start a new retail venture aimed at emerging markets.
Best Buy said it will close 11 big-box stores in the U.K. and will focus instead on the 2,500 Best Buy Europe stores currently in operation under the Carphone Warehouse and Phone House brands, and will change those smaller stores to a new store format. Best Buy said the deal will allow the company to capture all of the potential profit in the growth of connected devices.
"Best Buy believes that there is a significant untapped opportunity as connections migrate from phones to other connectable devices such as tablets, laptops, TVs and ereaders," the company said in a statement. "This transaction will enable Best Buy Mobile to accelerate the deployment of operational and connectivity expertise to these devices and for Best Buy to fully capture the profit potential of these opportunities."
In addition to those changes, Best Buy and Carphone Warehouse announced a new global mobile and connectivity venture called "Global Connect." The venture plans to partner with third parties in emerging markets to improve the performance of their connected products and services business.
The European venture between Best Buy and Carphone Warehouse was announced with much fanfare in May 2008, just months ahead of the start of the global financial crisis. The companies had ambitious plans to create a chain of 200 stores across Europe by 2013, but the rollout faltered in the U.K.
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
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