Sunday, May 18, 2008

Best Buy buying, Circuit City selling

Best Buy has recently bought half of UK's Carphone Warehouse and is rumored to be considering further European purchases.
Following its mammoth £1.1 billion purchase of half of Carphone Warehouse’s retail operation last week, US retailer Best Buy has signalled its intentions to continue its European push, hinting at further wide-scale retail chain purchases.
Rumors center on UK's DSGi (Dixons/PC World/Currys) and Kesa (Comet), as well as Germany's Media Markt.

DSGi, meanwhile, is planning to close hundreds of stores in the UK and Italy and lay off a substantial portion of its headquarters staff.

DSG is believed to be preparing to axe up to 200 of its 700 stores and convert dozens of outlets to a new consumer electronics superstore format that will include both its flagship brands PC World and Currys, according to the Sunday Times.

The revival strategy, which will be revealed on Thursday, marks the first phase of recently hired chief executive John Browett's plans to get the business back on track after two profit warnings so far this year. [...]

Mr Browett has already announced that 40 of its 150 stores in Italy will be shut over the next two years, but the key focus will be on his strategy for the key UK market.
And in the US, Circuit City, after initial reluctance, appears to be giving in to pressure to sell, and is opening its books for a possible buyout offer from Blockbuster and Carl Icahn.
Circuit City had previously resisted Blockbuster’s $1 billion-plus buyout offer, citing its questionable financing. But the CE chain said it has since received a letter from Icahn, the billionaire investor and principal Blockbuster shareholder, indicating that he would be willing to buy Circuit City himself if the video rental chain is unable to do so.

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