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Best Buy, Inc. (NYSE: BBY) is looking to expand faster and more furiously than previously thought in the United Kingdom. Best Buy, which joined up with Britain's Carphone Warehouse in a 50% ownership venture earlier this year, wants to take England by storm and is wasting little time in the effort.
The largest consumer electronics chain in the U.S. said that it would eventually roll out more than 200 stores in the UK over the long term, which is quite a bit more than had been expected. Best Buy wants to dominate that market just as it has conquered the U.S. market, and an aggressive international expansion like this cements Best Buy's goal of becoming a global retail player in consumer electronics.
But some are concerned that Best Buy's $2.1 billion chunk of Carphone Warehouse -- which is 50% of the company -- may be used to expand the Best Buy brand at the expense of the Carphone Warehouse brand. Best Buy wanted an immediate presence in the UK market by partnering with a leader there, and now it has that.
But Carphone Warehouse stockholders think Best Buy's brand could possibly damage Carphone Warehouse's brand. Is this a valid concern? Sure, but the degree depends on which side you're on, Best Buy or Carphone Warehouse.
Carphone Warehouse stockholders are concerned that Best Buy management would gain too much control over Carphone Warehouse. Well, the company already owns 50% of the company, so what's the beef?
Sure, Best Buy's management wants a fair amount of control, since it did put $2.1 billion into the ownership stake. Reports are that a typical Best Buy location in the UK would be about 30,000 square feet. That's a lot of laptops and LCD televisions to display, but Best Buy will probably have better luck moving them than Carphone Warehouse, whose shares have been falling all year.
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Reader Comments (Page 1 of 1)
8-06-2008 @ 3:41PM
Roxanne said...
I wonder if Best Buy has multilingual websites that cater to people who speak different languages. The best way to expand internationally is to create a website in the language that the customer speaks. This is possible with CMS (Content management Systems) like Bitrix Site Manager 7.0 (http://www.bitrixsoft.com) that uses UTF-8 coding making the creation and maintenance of these websites more simple.