Electricals retailer Best Buy saw losses at its UK-based ‘Big Box’ stores increase by more than £40 million over the last year, according to results published today.
Best Buy UK a 50/50 joint venture between telecommunications company Carphone Warehouse (CPW) and the North American firm, has reported a EBIT decline of £62.2 million in the 12 months to March 2011, up from £21 million the previous year.
The first ‘Big Box’ store was launched in April 2010 with a further six following during the last financial year and another four opening since March 2011.
Rumours have circulated that despite an initial target of 30 UK stores by 2013, store expansion is due to be halted but CPW today said: “We are in the process of evaluating the next steps in our multi-format/multichannel consumer electronics strategy.”
Along with the ‘Big Box’ outlets CPW & Best Buy operate concessions in each others’ established domestic stores under the title Best Buy Europe, which excluding the Best Buy UK arm saw EBIT grow from £160.8 million to £232.5 million over the year.
CPW did not reveal revenue figures for ‘Big Box’ stores but excused losses on the cost of setting up and promoting the operation.
Today’s statement read: “The business still has a disproportionately high central cost base, and has made a substantial investment during the year in marketing and promotional activity, to develop awareness of its brand and retail presence.”
CPW Europe, the continent’s largest independent mobile retailer, performed well during the year with headline EBIT up 18 per cent thanks it increased interest in smartphones.
Like-for-like sales rose 0.9 per cent for this division despite the difficult trading environment, and it plans to further roll out its Wireless World stores over this financial year.
Roger Taylor, CEO of CPW, commented: “This has been a year of considerable success for the group, during which our businesses have made impressive progress.
“The group is well positioned to maintain this momentum, despite the tough economic environment.
“This combination of financial strength and positive outlook lies behind the inauguration of our progressive dividend policy, with a dividend for the year ended March 31st 2011 of 5.0p.”