Plug pulled on Best Buy stores

CARPHONE Warehouse is pulling the plug on its 11 ‘big box’ electrical stores, citing continuing losses.

The stores, which include the unit in Dudley’s Merry Hill Centre, will be shut by the end of this year.

The move puts 1,100 jobs at risk at the shops but the firm said it hoped to find the “large majority” of staff alternative work.

The stores were only launched in April last year but have been hit by weak consumer spending and aggressive pricing from existing players online and on the High Street.

Roger Taylor, chief executive of Carphone Warehouse, said: “In light of the existing run rate of losses and the lack of visibility of an acceptable rate of return on historical and future potential investment, the decision has been taken to close these stores, subject to employee representative consultation.

“The closure of Best Buy UK will eliminate significant ongoing losses within Best Buy Europe.

“The business incurred operating losses of £62m in the year ended March 31, 2011, and £47m in the six months to September 30, 2011.”

Best Buy UK was a joint venture between Carphone Warehouse and US electrical retail giant Best Buy.

Mr Taylor said operating losses at the stores would be up to £30m to the time of closure while after tax the cash cost of closing the sites would be £65m to £75m.

Carphone and Best Buy initially planned to open 200 Best Buy stores across the UK and continental Europe.