Best Buy 2001 Annual Report Download - page 19

Best Buy Co., Inc.
18
Extending our Reach
O ne of the most significant benefits of our acquisition of
privately held M agnolia Hi-Fi is our access to an entirely
new customer. M agnolia Hi-Fi, a high-end electronics
retailer based in Seattle, was founded in 1954 and
operates 13 stores in W ashington, O regon and California.
It generates more than $100 million in annual sales of
audio and video home theater products for homes,
automobiles and businesses. Magnolia Hi-Fi is highly
regarded in the industry and holds the distinction of
winning Audio/ Video International magazine’s Retailer
of the Year award for 22 consecutive years.
Magnolia Hi-Fi is known for its knowledgeable staff,
exceptional customer service and broad selection of top-
of-the-line audio and video products. It showcases a wide
array of products for the home and car with an emphasis
on high-quality digital products. M agnolia Hi-Fi carries
dozens of high-end brands, including Alpine, Bose,
Boston Acoustics, Definitive Technology, Denon, Kenwood,
Klipsch, Krell, M artin-Logan, M cIntosh, Mitsubishi,
Panasonic, Sonus-Faber and Sony. Its commissioned
sales force includes a dedicated staff of employees,
many of whom have been with the company for more
than a decade.
The company offers a state-of-the-art design center as
well as an in-house repair/ installation department. The
Magnolia Hi-Fi Design Center, located in Seattle, is a
combination showplace, planning/ design facility and
work/ assembly shop. Architects, builders, designers and
homeowners use the center as a resource for integrating
audio and video into homes and businesses.
Magnolia Hi-Fi allows us to come to market with another
operational format within the same category of technology
and entertainment solutions for the home and automobile.
W e also have much to learn from Magnolia Hi-Fi, which
is noted for its expertise in high-end sales operations, strong
management team and stable operating platform.
The company also provides us with insights into consumer
acceptance of audio and video products as they come
to market. W e intend to use this knowledge to maximize
the opportunities early in the product cycle, when gross
profits are at their highest.
W e are operating M agnolia Hi-Fi as an autonomous
business under Jim Tweten, president of Magnolia Hi-Fi
since 1988, who is the son of Chairman and Founder
Len Tweten. M agnolia Hi-Fi employs approximately 450
people, including commissioned sales people, and
in-home and mobile electronics installers. From this base,
we plan to grow the chain, beginning with a handful of
stores in the San Francisco Bay area in fiscal 2002. W e
plan to carefully manage the growth of this chain to
ensure that the company’s entrepreneurial and quality-
focused culture remains intact.
Magnolia Hi-Fi