Best Buy (BBY) Delays Launch of UK Store

The Financial Times reported that electronics retailer Best Buy (NYSE: BBY) has delayed the launch of UK Best Buys as it is dealing with the financial crisis hitting the United States.

Best Buy, along with its JV partner Carphone Warehouse, has postponed the launch until Q1 of 2010. It originally planned to open its first store in the UK this summer.

Carphone's finance director and chief executive of the retailing joint venture, insisted the postponement was "unrelated" to Best Buy's woes.

The Finance Director said by waiting the joint venture will be able to find better locations with cheaper rents.

Best Buy warned on profits in November after a large unexpected drop in sales, and said a month later it would decrease the number of new store openings in the US, Canada and China. So to many, the UK delay, relates to problems Best Buy is facing right now in the electronics retail market.

Barron's published a bearish piece on Best Buy back in January and mentioned that Best Buy would have to make aggressive cuts in its annual capital expenditures to maintain a healthy EBITDA. The delay of the launch of UK Best Buys will help to keep costs down in '09.

Best Buy Co., Inc. (Best Buy) is a specialty retailer of consumer electronics, home office products, entertainment software, appliances and related services.
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