Best Buy 2001 Annual Report Download - page 15

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In fiscal 2001, we acquired the four brands of
Minneapolis-based M usicland Stores Corporation.
W hile we expect the acquisition to have a limited impact
on our earnings in fiscal 2002, we believe that this
acquisition represents a significant long-term opportunity.
Through the Musicland brands, we can bring our core
competencies in retailing consumer electronics to several
new consumer segments, including segments typically
underserved at our Best Buy stores. M usicland’s mall-based
stores and rural market locations give us access to more
young people, more women and more rural communities.
Musicland’s 1,300 stores currently receive visits from
more than 300 million consumers annually.
W e also believe that we can significantly boost
Musicland’s performance, which has been lower than
that of Best Buy stores in several key metrics, including
sales productivity and operating efficiency.
W e began by integrating M usicland with Best Buy. W e
have centralized our support functions, including logistics,
information systems, real estate and legal. In the coming
year, we plan to enhance Musicland’s inventory management
and human resources support systems as well.
Transforming Sam Goody
Another key initiative in fiscal 2002 is the introduction of
new products at our mall-based Sam Goody stores,
Musicland’s largest brand. These approximately 630
stores typically measure 4,500 square feet. W e see the
greatest potential to leverage Best Buy’s strength as a
Reaching New
As games such as Playstation 2 move to the DVD
format, they become natural extensions of products
sold at Sam Goody stores today.