Carphone’s deal with Best Buy will see it go head-to-head with DSG and John Lewis in the UK and European consumer electronics market.
With Best Buy now owning 50% of Carphone Warehouse’s retail business, a separate joint venture has been set up between the two entities.
The traditional Carphone retail business will continue running, with more resources and buying power for the existing strategy to add laptops with broadband subscriptions on top of handsets and mobile contracts.
Alongside that, Best Buy will bring its large scale electronics retail format to the UK, under what is expected to be the ‘Best Buy Big Box’ brand.
Stores are expected to be between 20,000 and 30,000 sq foot in size, selling a range of electronics products ranging from toasters to fridges.
It is also expected that 200 stores have been earmarked for the project, with the first to open in 2009.
A six man management committee of the new venture will include Carphone’s existing group CEO and chairman Charles Dunstone, UK CEO Andrew Harrison and CFO Roger Taylor. Taylor will be the CEO of the new venture. The committee will also include three of the Best Buy management team. A management structure will be formulated and senior managers are expected to be appointed in the coming months.
Harrison told Mobile: ‘If you look at Best Buy’s business model it is entirely different to what we have from big electronics retailers like DSG. The UK is completely underserved in that space. John lewis is doing well in this space, but shopping is a leisure activity in the UK, and no one has really tapped into that. The big difference [between DSG and Best Buy] is the emphasis is on the people. Dixons will focus on products, Best Buy will focus on people and customer experience.’