12/13/2011 4:05:54 PM
Best Buy counts cost of UK exit as Q3 profits slump
US retailer Best Buy's ill-fated UK venture, which will see it close its 11 stores next month, has cost the business almost $150m.
In its third quarter figures released this afternoon, the retailer's operating income was $178m, down from $385m for the same period in 2010. Sales were up 2% to $12.1bn.
For the three months ending 26 November, it said the restructuring costs of its UK business were a large factor in operating income plummeting by 53%. The retailer said $150m of pre-tax costs were 'largely' due to its plan to close 11 big box stores in the UK as well as dispose assets in the United States. It also reported a pre-tax gain of $55m due to the sale of shares in Carphone Warehouse and Talk Talk.
Best Buy announced in November that it was exiting from 11 UK stores, which will close for the last time on 15 January. It said at the time that it hoped to move the 1,100 staff elsewhere within the organisation.