appears to be having a bit of trouble pushing its mega store mentality over in Europe and has decided to shutter all 11 of its U.K. pilot big box stores. The electronics chain crunched the numbers and came to the conclusion that it makes more financial sense to refocus its efforts in Europe on its installed base of 2,500 small box stores.
"Best Buy Europe launched a big box format test in the U.K. in April 2010, ultimately resulting in 11 stores. Based on challenging economic conditions and profit expectations of these stores, Best Buy Europe is announcing that it plans to close all 11 of these stores effective at the end of the calendar year," Best Buy said in a statement. "As required in the U.K., Best Buy Europe will conduct a consultation of the affected employees regarding the closure of the pilot stores. In the future, Best Buy Europe will leverage the strength of the installed base of approximately 2,500 small box mobility stores and upgrade many to the 'Wireless World' store by taking its historically successful format to the next level of store experience and service and incorporating an even wider range of connectivity devices."
Image Source: Flickr (Rob Boudon)
It's never good when a company throws around terms and phrases like "challenging economic conditions," and in this case, it will result in Best Buy taking a pre-tax restructuring charge of $250 to $270 million (of which approximately $140 to $150 million will be attributable to Best Buy.) for its second half of fiscal 2012.