Best Buy 2001 Annual Report Download - page 7

which will be approximately 30,000 square feet. W ith
this as a base, we will embark on a store expansion
campaign, culminating with 60 to 65 Canadian stores.
O ur experiences operating our six brands in the United
States and our customer-centric culture will be invaluable
as we determine how to satisfy the needs and wants of
international consumers.
Measuring our Success
N ow that we have defined new avenues for growth, the
next step is to implement our new initiatives and to measure
the results.
W ith our M usicland acquisition, the key measures will
be EVA, growth in sales productivity and increase in
profitability. In addition, we believe that we can increase
operating earnings by leveraging our fixed costs over a
larger revenue base.
W e will work to achieve these goals through a series
of initiatives. In February 2001, we began testing the
introduction of consumer electronics products, new
fixtures and lighting, and new store layouts at Sam Goody
stores. W e expect to use the test results as the basis
for transforming our Sam Goody stores, with an eye on
revenue enhancement.
In fiscal 2002, we plan to complete an analysis of the
brand’s strategic positioning, consumer targeting, labor
model and other aspects of the store experience. W e
then will apply the transformed operating model to existing
Sam Goody stores as well as all new Sam Goody stores
that we open. W e also plan to transform our On Cue
stores in fiscal 2003, using experience gained from the
Sam Goody transformation. Long term, we plan to grow
these stores. In fact, we have identified more than 1,000
potential sites for this rural, small format store.
O ur initial goals for M agnolia Hi-Fi are less ambitious, but
also are significant. In the coming year, we hope to gain an
insider’s perspective on two key parts of Magnolia Hi-Fi’s
business model: world-class customer service and skilled
marketing to high-end consumers and audiophiles. W e
believe that the primary value of acquiring M agnolia Hi-Fi
is what we can learn about service and installation, which
we hope to incorporate into our other brands.
All of these experiences will enable us to move more
successfully into Canada and, eventually, into other
international markets. O ur measures for our expansion into
Canada include store growth, EVA, sales productivity
and market share.
Preparing for Grow th
These key strategies are possible because of our
energetic, highly skilled and driven employees. I view
them as a competitive advantage. In addition, with the
management structure we announced in February, we
have the executive talent in place to pursue each new
initiative, while continuing to grow our Best Buy stores
and reaching the full potential of these stores. I understand
the value of developing a deep bench of skilled leaders
Best Buy Co., Inc.
4
Letter To Shareholders