Best Buy UK spent £200m on failed megastores Best Buy's efforts to win over UK consumers were an expensive failure, costing some £200m to set up just 11 big box stores. The stakeholders of the joint venture US retailer Best Buy and the UK's Carphone Warehouse (CPW) yesterday pulled the plug on the business, as investing more capital in the roll-out of another 90 stores …
"As a result, Best Buy has paid $1.3bn for CPW's share in the joint venture."
"Taylor said that from "start to finish", the overall investment was "circa £100m each in terms of ourselves and Best Buy that we've sunk into the opportunity"."
That's not a bad return on investment by CPW; £100m in $1.3bn out! Their shareholders should be very happy. As for Best Buy however, WTF?
I had heard of Best Buy, but just saw this joint venture with the Carphone Whorehouse as a Dixons'/PCWorld clone. And frankly, who'd want to clone that business?
If they'd come into the market advertising lower prices or something they might have done better than they did, but I suspect a lot of the markup on these "big box" retailers' wares is to cover the large stores and hundreds of salespeople. So it's probably impossible to reduce margins below their competitors and sell much cheaper anyway.
"Their main downfall seems to have been massive assumptions about their brand awareness in the UK - yes, people who've lived in the US or are particularly switched on knew about Best Buy, but most of the population drove past the signage thinking "Best Buy? I've no idea what they sell"."
Anybody who has lived in the States or knows about Best Buy probably knows they are one of the few firms with a worse reputation for customer service than DSG.
I went to Currys, Comet, Best Buy, John Lewis and done some diggin on t'internet.....
Best Buy was the most expensive retailer for the TV I wanted, didn't have it in stock anyway and said they would deliver it to my home in 2-3 weeks.
Currys was cheaper than BB by almost £50 (closely followed by John Lewis) and gave me the TV to take away there and then. Put me off BB on my first visit.
(btw, yes I could probably have found it cheaper than Currys if I had really tried, but I was happy at my £50 saving and sick of shopping)
Having worked for the bunch of c*#nts known as DSGi (well that was what they were known as a few years ago & there was little choice at the time) I can only hope that this is a Pyrrhic victory. For those of you who don't know what that is or cannot be bothered to Google it, I hope that they have expended so much effort into defending their pathetic retail offering that they are extirpated completely from every high street, website and out of town wasteland in this country and every other country that they have infiltrated. Trouble is the c*#nts at the top won't go hungry but some very loyal, knowledgeable - yes there are some - employees will struggle.
I used to work for a Sony Centre and when it was announced that Besy Buy would be opening in Southampton I said to my manager "British public do not like Americans, just watch they will be closed within 2 years". He didn't believe me. Then what do they go and do, advertise on the radio and TV voiced over by an American actor, big mistake. Come on guys all you have to do is change your adverts to a famous british celeb (e.g. Tom Baker) then maybe you will be in with a fighting chance!
As the others pointed out - I went to Best Buy and couldn't tell the difference compared to one of the other big electronic retailers - specially PC World. I was really hoping to at least see some kit you can't buy else where. That doesn't include the silly and overpriced electric bikes and scooters. Also - I didn't spot any prices which seemed attractive in any way. So why would anybody have bothered?
Does it really take a genius to predict that launching a chain of electronics stores, in the middle of a recession, with no edge over the competition, and prices in some cases above the competition - in a market segment which is in steady decline on the high street - is doomed to fail? How dumb to you have to be to throw £200 million at it before realising you don't stand a chance?
Oh - and the staff uniforms were beyond dreadful. Which colour blind moron designed those? Maybe Americans prefer their sales staff dressed in awfully fitting, bland and mismatching colours garments. Who knows.
In my opinion..
Best Buy failed for a combination of reasons.
1) Little or no advertising. They assumed (wrongly) that the bulk of the UK population would know them from their US roots..
2) Where they did advertise, they advertised large selections of goods at low prices. What I got whenever I went into the BB on Purley Way in Croydon is an (admittedly) large selection of goods at high prices. John Lewis isn't particularly cheap, but they are just up the road from that store and considerably cheaper for electronic goods. They also have the advantage that they have established a good reputation for after sales service.
What they should have done is what Argos apparently did when they were first launched. They should have had incredibly low prices, and blitzed the country with advertising telling us how cheap they are but how they somehow maintain good service (I know that Argos isn't really a good example of good service).
Then they can do what Argos also did, and having hooked their target customers, raise the prices gradually.
Oh, and launching when we are out of recession might have been a good idea as well.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
