Carphone Warehouse have announced that 11 of their Best Buy consumer electronics stores will be closing. This is less than two years after they opened.
Stores will be axed across the southeast and Midlands with the likely loss of around 1,100 jobs. The company had hoped to create 8,000 jobs and open stores throughout the UK and Europe.
Charles Dunstone the founder of Carphone Warehouse is in line for a substantial windfall as he prepares to sell the mobile phone retailer’s US business for up to £1billion.
The British retailer owns a 50 per cent stake in the joint venture, with a value between £620 and£1billion.
Shareholders are expected to receive a portion of the proceeds made in the form of a special dividend.
In partnership with Best Buy, 11 warehouse-sized stores were opened in Britain two years ago as a predecessor to 100 outlets around Europe. However following a strategic review of the ‘Big Box’ shops, which are set to lose a staggering £80million this year, they will be closed.
Stores are located in Aintree, Bristol, Croydon, Derby, Enfield, Hayes, Hedge End, Merry Hill, Nottingham, Rotherham and Thurrock.
This information comes following results published by accountants BDO, which shown that non-food high street sales dropped by 3 per cent in October compared to the previous year’s figures.
Non-store sales including Internet and catalogue orders however were up to 20.7 per cent compared to last October. This information shows a further rise in online shopping which has hit high street retail badly.
Best Buy Europe was formed in 2008 when the company spent £1.1billion in a deal with Carphone Warehouse to buy 50 per cent of their retail shops, launching their own branded stores across the UK.
However the company’s problem is an example of a wider crisis of consumer confidence that has swept the high street.
This move has meant other electronic retailers such as Comet and Argos are continually under pressure following the drawback on customers buying big-ticket items or choosing to shop online.
By Charlotte Greenhalgh