Best Buy to halt UK expansion?
CEO Brian Dunn refuses to comment on postponement rumours after £62m loss.
With operations in the United States, Canada, Europe, China and Mexico, Best Buy is a multinational retailer...
US retail giant Best Buy is rumoured to be postponing its planned expansion into the UK market.
Best Buy intended to launch 90 UK stores in a partnership with Carphone Warehouse by 2013. However, only 10 have been opened since April last year, and figures released this week by Carphone Warehouse showed losses of £62m - £12m more than estimated.
Best Buy's global first quarter earnings exceeded analysts' expectations, resulting in an increase in its share price on Tuesday. But rising promotional costs have put greater pressure on its profit margins, and it is now seeking to reduce the size of around 50 stores in the United States.
In an earnings conference call on Tuesday, CEO Brian Dunn addressed the situation in Europe. "Last year we opened six big-box stores in the UK. We're really pleased with what we've seen in terms of consumers... That being said, we manage our business as a portfolio of brands and businesses, and all of them over time have to earn their right to capital."
When asked directly about the rumoured halt to Best Buy's UK expansion plans, Dunn replied, "We don't have any imminent announcement about our business in the UK, and you know that I don't comment on rumor."