11/9/2011 12:04:22 PM
Harrison after leaner, meaner Carphone
Best Buy Europe and Carphone Warehouse CEO Andrew Harrison was defiant in the face of the collapse of the Best Buy stores venture this week, vowing: ‘This is not a day our competitors should celebrate. Today is all about focus.
‘We are increasingly clear about who and what we want to be. This is not a step back, this is about getting into a winning position for the future, investing where we can be world beaters.’
Carphone will accelerate investment in its Wireless World format stores, using the £840m it has raised by selling its stake in Best Buy’s US business.
‘If you look at the scale you need to get to cut through in this sector (consumer electrical retailing), it is a very significant investment. If you have a choice to play to your strengths, you should invest in your connectivity strategy, which is going in a much stronger direction.’
Board level sources from all sides of the industry greeted the news of the £70 million closure programme with grim approval, many saying it was inevitable.
‘Their core competency is not running ‘big box’ electronics stores, it’s a completely different business model. The 50:50 corporate structure was never sustainable,’ said one source.
A manufacturer chief told Mobile: ‘It is no surprise whatsoever to anyone in the industry and Carphone Warehouse did not enamour itself to vendors in this time as it was quite clearly trying to get more money into the coffers by squeezing vendors to pay for the expansion.’
Harrison denied that Best Buy’s aspirations in electrical retailing were simplistic and over-ambitious: ‘[To those who say I told you so] I would say how many businesses have you created from nothing? Look at the track record of people involved in this. We have built a $5bn business in the US, we have built Carphone, we have built Talk Talk. What have they done?’
Harrison also rubbished the claims of manufacturers that they had been squeezed to help pay for its electrical retailing adventure: ‘We are a small European retailer. The idea that we’re bullying these huge multinational vendors is frankly laughable.
‘I don’t think they should start breathing out just yet. Nothing is going to change in the way we purchase. I don’t think what we have done in our business (with Carphone purchasing) is related to [the big box].
‘The cash generated from the US has more than compensated us for the money we invested in the big box.’