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Best Buy Building 60 Next-Generation Stores This Year

1/31/2005 09:46:00 PM Eastern

Minneapolis — Best Buy will open 60 new flagship stores in the United States this year as it pushes toward its build-out goal of 1,000 superstores nationwide. The company currently operates about 688 Best Buy and Magnolia Audio Video locations domestically.

The new units will incorporate lessons learned from its laboratory and customer centricity stores, and will be built to accommodate the company’s move to a consumer-segmented business model. Some may also feature Magnolia stores-within-stores, as the retailer continues to integrate its high-end subsidiary into its existing Best Buy store base.

According to Brian Dunn, Best Buy’s recently named retail/North America president, store enhancements will provide an improved shopping experience for customers and increased efficiencies that will cut construction and fixturing costs by about 10 percent.

Most of the new stores will be used to backfill current Best Buy markets to create additional shopping venues, and will leverage existing distribution centers and marketing programs, the company said. About half the stores will likely be 30,000-square-foot units, with the balance split between Best Buy’s 20,000-square-foot and 45,000-square foot formats.

The new units will increase the company’s total domestic retail square footage (excluding distribution centers) 1.6 million square feet, to 30.1 million square feet by February 2006, the end of its next fiscal year.

The company will also be expanding north of the border, with 13 new Best Buy stores and two additional Future Shops planned for the Canadian market this year.

The majority of new stores, both Canadian and domestic, will be opened prior to the holiday selling season during the company’s fiscal third quarter, which follows Best Buy’s usual timeframe for new store construction.