Best Buy brand bows out of UK

Best Buy Europe admits big-box format stores weren't profitable and will focus on expanding Carphone Warehouse brand

Best Buy Europe is closing its 11 large-format stores in the UK, citing "challenging economic conditions" and poor profits.

Best Buy Europe, a joint venture between Carphone Warehouse and Best Buy, launched the first of its Best Buy-branded "big-box" format stores in April 2010.

It plans to close all 11 of these stores by the end of 2011 and instead focus on its installed base of 2,500 profitable "small-box" Carphone Warehouse and Phone House-branded stores across nine European countries.

The 11 stores, situated in Thurrock, Southampton, Birmingham, Liverpool, Croydon, Derby, Bristol, Hayes, Rotherham, Nottingham and Enfield, employ some 1,100 staff.

In a statement, Carphone Warehouse confirmed that a consultation would be started with affected staff.

"Best Buy Europe is confident it will be able to redeploy the majority of those affected within other areas of its business," it said. "The intention is to complete the closure of these stores by the end of the calendar year."

At the time it invested £1bn into the joint venture in 2009, Best Buy harboured bullish ambitions to crack the UK and European market. At one time, it was even linked to a possible buyout of Dixons.

Reports that it would put its European expansion on hold first emerged in June. This was perhaps inevitable in light of the poor run of results from local rivals, including Dixons and Comet.

Best Buy Europe said it will now focus on upgrading many of its small-box mobility outlets into ‘Wireless World' stores, which it said incorporate a wider range of connectivity devices. Currently, 141 of Carphone Warehouse's 805 UK stores and 56 of its 1,648 continental European stores are Wireless World format stores.

In a statement, Best Buy said: "Since 2008, the consumer electronics marketplace has changed substantially as a result of the economic times, the progress of online retailing and the growth of new products such as smartphones, tablets and apps. Best Buy Europe believes its ‘connectivity' strategy should be prioritised within Carphone Warehouse because it offers a superior rate of return on capital investment and is best placed to meet the future needs of customers."