London Property industry sources in the United Kingdom told Reuters on Monday that Best Buy is closing in on a range of possible sites in southern England and Wales, with the intent to launch stores in the United Kingdom next spring.
Best Buy and its British joint-venture partner Carphone Warehouse Group had previously planned to launch its U.K. expansion with a first store opening in summer 2009. But in early March the duo delayed its plans for entry until first quarter 2010.
Now a property industry source said Best Buy and Carphone Warehouse are considering stores of 30,000 sq. ft. to 50,000 sq. ft. in Southampton, Lakeside (Essex), Bristol, Cardiff, Swansea, Ipswich and Crawley. The source said the joint venture was being offered rental deals, which were running about $14 to $29 per ft.
According to the source, landlord- and precinct-offered incentive packages worth between 500,000 pounds and 2 million pounds (approximately $730,000 and $3 million) are being offered by landlords to attract the brand.
In March, the announcement to delay the British expansion cited lack of proper sites and denied the postponement was due to Best Buy’s financial downturn.
Since the postponement, however, Best Buy reported increased revenues and profits for the fourth quarter and fiscal year 2009, although the retailer also saw lower net earnings and operating income. For fiscal 2010, Best Buy said it projects higher revenues and gross profits, with flat to slightly lower same-store sales. The retailer also said it expects to open 65 net new stores, 20 internationally.
As part of its joint venture with Carphone Warehouse, Best Buy is also opening mobile-phone stores in U.S. malls and urban downtown areas. Best Buy is continuing that program this year, having opened 41 Best buy Mobile JV stores in the United States and three in Canada as of February 2008.
Regarding its foray into the United Kingdom, a spokesman for the joint venture said it was yet to sign any agreements.
"We have not signed any deals and are still surveying a variety of sites up and down the country," he said.