Best Buy shakes up business, closing U.K. big-box stores

From CNET News.com: After several disappointing quarters that left shareholders concerned about its future, Best Buy has announced a host of changes to its operation that it believes, could dramatically improve its financial standing.

First up, Best Buy says that it will buy out Carphone Warehouse (CPW)'s interest in the company's U.S. and Canadian Best Buy Mobile business. Currently, Best Buy and Carphone Warehouse share all profits related to sales through the Mobile retail service. By buying CPW out for $1.3 billion, the retailer believes that it can more fully capitalize on the growth of mobile devices.

"Best Buy believes that there is a significant untapped opportunity as connections migrate from phones to other connectable devices such as tablets, laptops, TVs and e-readers," the company said in a statement. "This transaction will enable Best Buy Mobile to accelerate the deployment of operational and connectivity expertise to these devices and for Best Buy to fully capture the profit potential of these opportunities."

However, once the payment is made, CPW isn't necessarily out of Best Buy's hair. For one, CPW owns 50 percent of Best Buy Europe, the division that operates the company's stores across that continent. In addition, CPW has been requested by Best Buy to stay on in a "consultancy" capacity, helping to run the Best Buy Mobile business across the U.S. and Canada for up to five years.

Looking across the pond, Best Buy has also decided to shutter all 11 big-box stores it currently operates in the U.K. by the end of the year. The stores, which were launched in April 2010, were called a "test" by Best Buy to see if it could see the same level of success in the U.K. as it did in the U.S. and Canada. However, over the last year, those stores have proven to be a drain on the company's financials, prompting it to rethink its strategy in Europe.

As part of that plan to fix its troubles in Europe, Best Buy says that it will bring its "Wireless World" experience to some of the 2,500 small box mobility stores it currently operates in Europe with CPW. Those stores, which operate under The Carphone Warehouse and The Phone House names, will provide customers with "an even wider range of connectivity devices."

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