Best Buy to halt its UK expansion
BEST BUY may be forced to shelve plans to open a string of “Big Box” UK retail stores amid sliding demand for high price consumer electronics.
The American retailer, which entered into a European partnership with Carphone Warehouse in 2008, is understood to be pressing ahead with plans to open three new stores this year but may halt its expansion after that.
A company spokesman declined to comment but sources close to the firm said no final decision has been made yet. It is unlikely a decision will be made in time for Carphone’s results and strategy announcement tomorrow.
The Best Buy UK chain, which has eight mega stores, is expected to make a loss of more than £40m this year. It has been hit by a marked downturn in demand for high-end goods including flat-screen TVs.
Earlier this year it reaffirmed its determination to succeed in the UK despite pulling out of China and Turkey. However, it has already signalled it will fall far short of initial plans to open 80 UK stores by 2013.
Carphone has been buoyed by the roaring success of its US tie-up with Best Buy, where its mobile phone business has seen has seen revenues rocket over the last 12 months.