After suffering weaker sales, Best Buy is thinking small: It says it will focus on expanding its petite Best Buy Mobile stores, which are about 1,400 square feet, and shrink its regular stores by about 10% in the next three to five years.
The retailer is beefing up its mobile offerings, adding 150 Best Buy Mobile stand-alone stores in the fiscal year, and expects to have an estimated 600 to 800 stores within five years. The smaller mobile stores emphasize impartial advice, with 10 carriers and 14 manufacturers, as well as straightforward pricing and tech-savvy associates, and had revenue of about $2.5 billion in fiscal 2011. Currently, there are 1,099 store-within-a-store units, expanding to an additional 600 locations, and 191 stand-alones, with about 325 scheduled to be completed by the end of the current fiscal year.
And the retailer says it’s also exploring additional opportunities in mobile phones, tablets, gaming and appliances.
While Best Buy claims to generate the highest sales per square footage of any large format retailer in the U.S. and sells one out of every three U.S. televisions, it has struggled of late, with same-store sales falling 4.6% in its most recent quarter.
The category isn’t an easy one: Wal-Mart Stores this week reportedly says it will reduce space for electronics in its U.S. stores, saying that sales in that category have declined.
A company building a new nationwide wireless broadbandnetwork, says Best Buy will resell access to that network, starting with a trial early next year.
According to the LightSquared CEO Sanjiv Ahuja “Best Buy Co. is the biggest customer so far to sign up with LightSquared. The electronics chain will sell the service under its own Best Buy Connect brand”
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