Best Buy To Hit Europe

By Digital Trends Staff May 12, 2008

Best Buy has big plans for Europe. The economy might not be good, but that hasn’t stopped the US retailing giant from paying a cool $2.1 billion to acquire a 50% stake in the bricks and mortar operation of Britain’s Carphone Warehouse, which operates 2,400 stores in nine European countries, selling mobile phones as well as plans for many different networks.

All those stores will keep their names and continue in business, even as Best Buy and Carphone Warehouse team on new stores under the Best Buy banner which will feature a full range of electronics and appliances – with a Carphone Warehouse boutique shop inside.

Carphone Warehouse has grown into a juggernaut. Apart from retail, it also now offers its own landline telecoms, as well as a broadband service, and it plans to use the infusion of cash to boost that. In a statement, the company said it will use the money "to pay down debt, invest in broadband customer growth and infrastructure, and invest in new areas of growth presented by the transaction." Carphone Warehouse’s phone and broadband business isn’t affected by the deal.

Although full details haven’t been confirmed, Best Buy is expected to open its first stores in the UK next year before venturing into mainland Europe. That would replicate the strategy it used in China, where it opened two Best Buy stores, then another 25 outlets branded Five Star, according to Business Week.

The move into Britain will put Best Buy into direct competition with long-established retailers like Curry’s and Dixons, who dominate the market there, and who, along with others, have seen a downturn in consumer spending since the credit crunch hit. Whether the Best Buy – Carphone Warehouse alliance can make a dent in the market remains to be seen.

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