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Best Buy reports second quarter figures

by Stuart Wilson, Wednesday 23 September 2009

Retail behemoth Best Buy has reported global sales for the second quarter ending August 2009 of US$11.02 billion – up 12% year-on-year – with profits hitting US$158m. International sales were up 65% to US$2.7 billion thanks to the inclusion of revenue from Best Buy Europe.

Bob Willett, CEO of Best Buy International, commented: “Although top-line results continued to be challenged, overall international performance was consistent with our expectations. We are pleased with the market share gains in Europe and Canada and the improving performance in China.”

“Our European business continued to add connections in the fiscal second quarter and showed market share gains in the UK. Market,” Willett continued. “We drove synergies around the globe, best represented by our private label product distribution. We will continue to focus on leveraging our assets in Europe and investing carefully in international infrastructure to support our long-term growth strategy.”

The retail giant also gave some valuable insight into its European operation within its financial statement, explaining that Best Buy Europe derives most of its operating profits during the fiscal first and fourth quarters. The company claimed that the fiscal second quarter has historically represented the year’s low point for operating results.

The statement continued: “Also included in these results is approximately US$20 million related to non-cash amortisation expenses of intangible assets related to acquired tradenames and customer relationships in Best Buy Europe.”

Best Buy has completed an agreement with Vodafone in Europe. The company claims that this makes it the only mobile phone retailer in the UK offering all major carriers. The company has also signed leases on large format retail sites in the UK and remains committed to opening its first UK-based big box stores in spring 2010.

Last month Best Buy confirmed the appointment of Scott Wheway as CEO of its European operation. Best Buy Europe was created in May 2008, when Best Buy and Carphone Warehouse agreed to create a new company.

In his new role Wheway will report to the shareholder board of Best Buy Europe. He assumes responsibility for all Best Buy Europe operations, including Carphone Warehouse’s 2,450 stores across nine European markets, its online and direct businesses, insurance operations and the big box Best Buy stores that are planned in Europe.

“It was just one year ago that we announced the creation of Best Buy Europe and described our vision to transform consumer electronics retailing across Europe. I am delighted that Scott has agreed to lead Best Buy Europe into its next chapter,” said Willett.

“Scott is the consummate retailer. He’s never forgotten his roots as a line-level store employee, and he remains passionate about meeting customer needs. His energy and background are a brilliant fit for this exciting challenge as we move forward with our strategy in Europe,” he added.

UAE business group Al-Futtaim recently named Willett as a non-executive board director. Al-Futtaim’s business includes UAE technology and consumer electronics retailer Plug-Ins. Read full story here

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