Best Buy UK reveals £29m losses

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Best Buy UK reveals £29m losses

Simon Quicke

Best Buy UK might have gained plenty of headlines with its arrival in British retail parks earlier this year but its a £29m loss which is currently gaining it publicity.

The retailer made the losses in the six months to 30 September, revealed in Carphone Warehouse results, and is not expected to turn that situation around in this fiscal year.

The operating losses could reach as high as £55m for the full year with Carphone revealing it plans to work even harder to market the chain.

The costs of setting up stores, which included a new opening in Derby following hot on the heels of Croydon last week, was one of the main causes for the losses and with plans for more openings next year and the launch of a web shop those costs are continuing.

Best Buy Europe, which includes Carphone Warehouse in the UK, generated an 81% increase in EBIT year-on-year, from £32m to £58m. The vast majority of that was contributed by mobile phone sales.

Best Buy UK's £29m EBIT loss reflected further investment in infrastructure and IT, together with launch costs for the first stores and online platform, said Carphone Warehouse.

Roger Taylor, Carphone Warehouse CEO, said that the reaction from the puyblic to the arrival of the US retailer on these shores had been a positive one.

"Customer response to our first five Best Buy branded 'Big Box' stores has been overwhelmingly positive, with the sixth store opening in Derby today. With yesterday's launch of its transactional website, Best Buy gains national reach and is able to compete as a truly multi-channel retailer," he said.

The initial forecasts for losses of £45m at the end of the fiscal year have also been revised upwards as more money is put into developing the UK stores.

" We will continue to invest in our Best Buy proposition during this initial launch period, with greater marketing activity than initially planned, and now expect operating losses of between £50m and £55m from Best Buy UK," stated the Carphone Warehouse results.

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