Carphone Warehouse to close BestBuy UK
Nick Clark is the arts correspondent of The Independent. He joined the newspaper in June 2007, initially reporting on the stock markets. He has covered beats including the City, and technology, media and telecoms and made the switch to arts in December 2011. He has also contributed articles to the sports section.
Monday 07 November 2011
Carphone Warehouse is understood to be set to close the failed "Big Box" Best Buy stores in the UK, with the announcement expected at its financial results this week.
The company has been reviewing the 11 electrical superstores, and has reportedly decided to cut its losses.
It marks a rare failure for chairman Charles Dunstone, who was locked in negotiations throughout the weekend.
Carphone is scheduled to announce its interim management statement on Tuesday but could bring it forward to today after the news emerged at the weekend.
Analysts have predicted the closure of the Big Box stores for months, saying the venture would rack up losses of £70m this year. The closure of the stores will put the 1,100 staff who work there at risk.
BestBuy Europe is an equal joint venture between Carphone and US electrical giant Best Buy. Initially, the companies planned to open 200 stores across Europe by 2013.
The UK business was troubled from the start as the credit crunch delayed the original launch date by two years. In June, Carphone chief executive Roger Taylor admitted that the Best Buy UK stores were under review, conceding it had suspended new lease agreements.
The two venture partners are expected to maintain their relationship. Best Buy has a 50 per cent stake in Carphone's retail business and is expected to sell products in Carphone stores.
A spokesman for Carphone Warehouse said: "We always said we would open 11 stores and then conduct a strategy review. We are now conducting our evaluation with our partners and will provide an update in due course."
Carphone may also reportedly announce the sale of its interest in the US mobile joint venture with Best Buy. The sale of 50 per cent of the business, which was set up in 2006, is to bring in close to £1bn. Carphone is expected to return the money to shareholders in the form of a special dividend, according to reports by Sky News. Other electrical stores remain under pressure, with Kesa reviewing operations at its loss-making chain Comet.
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