Best Buy and The Carphone Warehouse Form New Venture
It is official, the Carphone Warehouse Group PLC, the UK’s largest mobile phone retailer, and Best Buy Co., Inc., North America’s leading source for electronics, have agreed to form a new venture. This is exciting news, especially considering the multitude of both these retailers.
The Carphone Warehouse’s existing business consists of over 2,400 stores in nine European countries, while Best Buy is one of the world’s leading consumer electronic retailers with fiscal 2008 revenues of $40 billion, operating income of $2.2 billion, 150,000 employees and 1,314 stores.
The plan, as of now, is that Best Buy will be acquiring a 50 percent stake in The Carphone Warehouse’s European and US retail interests, and following this the pair will form a joint-venture company.
As a result of this transaction, each retailer will end up owning a 50 percent share of the new retail business, while The Carphone Warehouse will continue to own all of their fixed lines telecoms business in the UK and Best Buy will hold a 2.9 percent stake in The Carphone Warehouse.
There are a few expectations on behalf of both retailers involved here, and the basic plans of this new venture includes building a significant market share in consumer electronics retailing in Europe through the roll-out of Best Buy stores, and receiving the benefit that will be offered from a long-term commercial agreement with The Carphone Warehouse’s fixed line division in the UK.
This venture looks to be quite promising, especially considering that consumer electronics has been recognized as the fastest growing category in European retail over the past five years. We will be sure to keep you posted on further details of this venture as information is released to us.