Best Buy Rolling Out Wireless Stores

By Alan Wolf -- TWICE, 4/24/2007

Minneapolis — Best Buy will roll out between 150 and 200 Best Buy Mobile wireless stores throughout the New York, Boston and Texas markets over the next 18 months.

The stores, which include freestanding locations and shops within Best Buy units, feature an expanded assortment of handsets, accessories and services for carriers including Cingular, Sprint and Verizon, and MVNOs including Amp’d, Boost, Go Phone, InPulse and Virgin.

The concept is a joint venture with Britain’s The Carphone Warehouse, the largest independent mobile phone retailer in Europe, which in turn is rolling out Best Buy’s Geek Squad service program throughout its trading area.

The partners opened the first nine pilot stores five months ago in Manhattan and have since expanded the chain to Secaucus, N.J., and the New York City boroughs of Brooklyn and Queens. The 13 current locations include five freestanding stores and eight in-store shops.

Carphone announced the rollout yesterday during its annual strategy update with investors. In a statement, Carphone CEO Charles Dunstone said, “Our U.S. trial has been successful and we are today announcing a rapid roll-out of the Best Buy Mobile format, allowing us to penetrate the substantial U.S. market in an effective manner with a world class partner."

In its presentation, Carphone identified the United States as ripe for the Mobile store concept due to a wireless market marked by poor customer service and the absence of a national independent specialty chain. The company also reported a dramatic increase in wireless sales at the in-store shops which exceeded 100 percent per door in the latter half of a 14-week test.

According to Goldman Sachs retail analyst Matthew Fassler, the in-store shops are showing more “favorable economics” than the standalone stores, although the freestanding locations could represent a “potent threat” to RadioShack.