Best Buy is reviewing its expansion plans in the UK in response to falling consumer demand for electronic goods.
The review could see the retailer shelve its original plans to open a nationwide chain of 80 ‘Big Box’ retail stores in the UK by 2013.
Best Buy, which set up a joint venture with Carphone Warehouse in 2008 as part of a strategy to storm the UK electronics market, is now expected to open no more than 11 stores in the UK. These will include eight stores that are already trading plus another three planned for launch this year.
A company spokesman declined to comment on reports of a major strategy review but sources close to the firm said no final decision has been made yet. No announcement on the review is expected in time for Carphone’s results and strategy announcement tomorrow.
The review follows the troubled launch of Best Buy in the UK, which saw delays to the opening of its first store in Thurrock, Essex. This slow start allowed rival DSGi to expand its retail footprint in preparation for Best Buy's arrival.
Best Buy also began haemorrhaging senior executives shortly after launch, with Paul Antoniadis, Best Buy’s branded operations chief, exiting the business just three months after Best Buy opened its Thurrock store.
Just a few months later Scott Wheway, CEO of Best Buy Europe and DeVere Forster, Best Buy’s online business chief, also quit. DeVere’s exit came just two months after the delayed launch of its e-commerce site.
Shortly after, UK marketing director Kevin Styles and the company’s commercial director Harry Parmar also left.
Best Buy UK is expected to lose £40m this year. Shelving the store expansion programme would cut up to £20m off its losses this year.
Conversely, Carphone has experienced a runaway success of its US tie-up with Best Buy, with its mobile phone business seeing revenues soar over the past 12 months.
Editor: Carol Millett