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Carphone Warehouse and Best Buy announce new initiatives
Posted: 27-Sep-2006 [Source: Carphone Warehouse]

[Carphone Warehouse and Best Buy to introduce a stand alone mobile retail business in the U.S. called Best Buy Mobile and the Geek Squad brand home computing business will be arriving in the UK.]

UK -- Carphone Warehouse and Best Buy (together the "Companies") have reached agreement on the terms of two new commercial initiatives to be introduced over the coming months: a stand alone mobile retail business in the US market operating under the Best Buy Mobile brand, and a home computing customer service business in the UK under the Geek Squad brand.

Best Buy Mobile

The Companies have signed an agreement to introduce Best Buy Mobile, a stand alone, multi-network mobile retail format for the US market. A trial period, during which stores will be opened in New York City, is about to commence. The combination of Best Buy's unrivalled expertise in the US consumer electronics market with Carphone Warehouse's excellent track record in independent mobile phone retailing across ten European markets creates a strong skill base from which to make Best Buy Mobile a success.

The Geek Squad UK

In a separate arrangement, the Companies have signed an agreement to launch the Geek Squad in the UK, providing a range of enhanced customer support services to home computer users. Best Buy's Geek Squad business in the US is well-established and growing rapidly. Carphone Warehouse's position both as a mass-market provider of broadband and a service-orientated retailer creates a ready-made customer base for Geek Squad services. The service will commence in 2007.

Financial impact

Carphone Warehouse's capital commitments during the trial periods for both Best Buy Mobile and The Geek Squad UK are low, and neither project is expected to have a material financial impact in the current financial year.

Bob Willett, CEO of Best Buy International, said: "Best Buy and Carphone Warehouse share the goal of creating superior customer experiences. Carphone Warehouse has an excellent track record in independent mobile phone retailing across Europe. Our strengths in consumer electronics retailing and computer support services in North America are unrivalled. This relationship will allow both of us to learn how to improve the customer experience by applying each other's respective strengths."

Charles Dunstone, CEO of Carphone Warehouse, said: "The US market is very large but has little retail distribution on the Carphone Warehouse model. In addition, when we look at the explosion of broadband penetration and home computing, we can easily see why the Geek Squad has been so successful in the States. For either of us to take our expertise into the other's market on our own would be a step into the unknown. Together, the complementary skills of Carphone Warehouse and Best Buy mean we can jointly test out both of these exciting opportunities at low cost, with low risk and little diversion of management time."


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