Best Buy UK has reported losses of £29m, with a further £50m of losses expected in the second half of its financial year. Carphone Warehouse Group reported its results for the six months ended 30 September today (5 November).
The losses reflected launch costs for its retail stores and online platform, as well as investment in infrastructure and IT, the joint venture between Carphone and the US ‘Big Box’ retailer said.
Best Buy UK expects to report losses of between £50m and £55m in the second half of the year. Its first five Best Buy stores are now open with the sixth opening in Derby today, while its website launched yesterday.
Meanwhile, Carphone Warehouse Europe reported profit of £44m, almost double its profit of £28m a year earlier, saying that it is on track for 100 Wireless World stores in Europe by 2010. Revenue remained flat at £1.7bn
At the end of September, Carphone had 40 Wireless World stores in the UK. The company will ‘accelerate’ roll out during the year ahead.
Carphone opened 45 stores and closes 51 during the first half of 2010, ending the period with 2,424 stores, down from 2,430 at the end of March 2010.
The company’s connection levels dropped by 2.3% year on year to 5.7 million, as lower volumes of prepay connections affected sales.
Carphone CEO Roger Taylor said: ‘We have delivered a strong first half with good performances across all our businesses, and we are raising our guidance for the full year.
‘A key growth driver is the increasing popularity of smartphones and customers’ growing interest in the “Connected World”, coupled with their recognition of our heritage of expertise and independent advice in explaining complex technologies. In the US, Best Buy Mobile is performing even better than we had expected with Best Buy Mobile’s US market share now around 5%, compared to around 1% when the venture started in 2006.
‘Customer response to our first five Best Buy branded “Big Box” stores has been overwhelmingly positive, with the sixth store opening in Derby today. With yesterday’s launch of its transactional website, Best Buy gains national reach and is able to compete as a truly multi-channel retailer.