Best Buy Splits with UK Partner, Focuses on US Market
Best Buy announced the company is buying out its United Kingdom partner, Carphone Warehouse Group, and closing its U.K. retail outlets.
The $1.3 billion deal is an effort by the electronics retail giant to focus on the increasingly competitive market in the U.S. Best Buy has faced competition from discount and online retailers recently.
The decision to move out of the U.K. market also was driven by the slumping economy in Europe, reported Reuters.
In recent weeks, Europe’s economy has been rattled with debt problems looming in Greece, Italy and other nations in the European Union. The connectivity market in the U.S., however, is growing.
"We are aggressively ramping up our growing connections capability to support consumers' increasingly connected lives across the entire range of devices entering the marketplace," said Brian J. Dunn, CEO of Best Buy.
Best Buy is a leader in the mobile and electronics sales in the U.S. The retail giant carries multiple brands and multiple platforms, with onsite experts to help customers connect each product.
"With these capabilities firmly established, and consumers living increasingly mobile, connected lives, there is a significant opportunity to grow connection sales and capture the strong profit they offer," Mr. Dunn added.
Analysts expect their recent strategy to increase Best Buy’s profits through 2013, according to reports.
The company also hopes the move will allow it to capture all the profits as consumers increasingly connect their mobile devices to other electronic gadgets, such as tablets, laptops, televisions and eReaders.
The two companies are also eyeing increased partnerships in emerging markets, according to reports.
China is slated to be a key player in the new business model, said Carphone Chief Executive Roger Taylor to Reuters. Working with local partners in the new markets would be the focus, rather than building big box stores.