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Best Buy To Open 150 Mobile Stores

2/22/2011 01:30:22 PM Eastern
Minneapolis - Best Buy will open around 150 Best Buy Mobile stand-alone-stores in the U.S. in fiscal 2012, as well as open six to eight large-format stores and "improve efficiencies in its U.S. supply-chain operations."

These plans, along with other international strategies, were made as part of an effort "intended to enhance growth in key strategic businesses and improve the financial performance of its international segment," the retailer said in a statement.  

While Best Buy said it will exit the Turkey market, 40 to 50 new store openings are planned in its Five Star business in China, and 18 Best Buy-branded large-format stores are intended to open in Canada, United Kingdom and Mexico.    

Nine Best Buy-branded stores will be closed in China.

 "We're pleased to continue our investments in the Best Buy Mobile and Five Star business models, which are profitable and have significant growth opportunities," said Brian Dunn, CEO of Best Buy. "The actions we are taking are consistent with our strategy of driving businesses that have earned the right to additional capital while curtailing activities that we believe will not meet our return on investment thresholds."

Regarding supply-chain efficiencies, the retailers said it "plans to restructure certain end-to-end supply-chain processes in the U.S., which it believes will improve efficiency, enhance customer service and reduce costs. This restructuring will result in charges related to asset impairments on real estate, equipment and inventory as well as costs incurred to deliver labor efficiencies. Separately, the company noted that it will take an impairment related to certain intangible trade-name assets as a part of its restructuring activities."

The restructuring charges will reportedly include asset impairments, settlement of lease obligations, facility closure costs, severance costs and inventory adjustments.

Best Buy declined to elaborate on its plans to streamline its supply-chain operations in the U.S.

Net sales dipped 1.6 percent for the retailer in December 2010, to $8.4 billion, with soft TV demand and a sharp dip in entertainment software sell-through cited.

U.S. revenue fell 3.2 percent to $6.5 billion, while comp-store sales dropped 5 percent.
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