Best Buy 2011 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2011 Best Buy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 138

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138

In fiscal 2007, we acquired California-based Pacific Sales Kitchen and Bath Centers, Inc. (‘‘Pacific Sales’’). Pacific Sales
specializes in the sale and installation of high-end and mass-market premium brand kitchen appliances, plumbing fixtures
and home entertainment products, with a focus on builders and remodelers.
In fiscal 2007, we also developed the Best Buy Mobile concept through a management consulting agreement with U.K.-
based The Carphone Warehouse Group PLC (‘‘CPW’’). Best Buy Mobile provides a comprehensive assortment of mobile
phones, accessories and related services using experienced sales personnel, now in all U.S. Best Buy stores, as well as
stand-alone stores.
In fiscal 2008, we acquired Speakeasy Inc. (‘‘Speakeasy’’). Speakeasy provides broadband, voice, data and information
technology services to small businesses. During the second quarter of fiscal 2011, we completed the sale of our
Speakeasy business to Covad Communications Group.
In fiscal 2009, we acquired Napster, Inc. Napster provides a comprehensive digital music service offering, including digital
music downloads and on-demand streaming capabilities.
International Segment
Our International segment was established in fiscal 2002 in connection with our acquisition of Future Shop Ltd., Canada’s
largest consumer electronics retailer.
During fiscal 2003, we launched our dual-branding strategy in Canada by introducing the Best Buy brand. The dual-
branding strategy allows us to retain Future Shop’s brand equity and attract more customers by offering a choice of
distinct store experiences.
In fiscal 2007, we acquired a 75% interest in Jiangsu Five Star Appliance Co., Ltd. (‘‘Five Star’’), one of China’s largest
appliance and consumer electronics retailers. We made the investment in Five Star to further our international growth
plans, to increase our knowledge of Chinese customers and to obtain an immediate retail presence in China. We also
opened our first Best Buy branded store in China, located in Shanghai, in fiscal 2007. In the fourth quarter of fiscal 2009,
we completed the acquisition of the remaining 25% interest in Five Star.
In fiscal 2009, we acquired a 50% share in Best Buy Europe Distributions Limited (‘‘Best Buy Europe’’). Best Buy Europe is
a venture with CPW, consisting of CPW’s former retail and distribution business with over 2,400 small-format The
Carphone Warehouse and The Phone House stores, online channels, device insurance operations, and mobile and fixed-
line telecommunication services. The transaction also included CPW’s economic interest in both Best Buy Mobile in the
U.S. and Geek Squad in the U.K. and Spain. We made the investment in Best Buy Europe to further our international
growth plans, to increase our knowledge of European customers and to obtain an immediate retail presence in Europe.
During fiscal 2011, we launched large-format Best Buy branded stores in the U.K. and a related online channel in the
European market.
In fiscal 2009, we also expanded our Best Buy Mobile operations to Canada by opening stand-alone stores. We now also
offer the Best Buy Mobile store-within-a-store experience in all Canadian Best Buy branded stores. Also in fiscal 2009, we
opened our first Best Buy branded store in Mexico, located in Mexico City.
In fiscal 2010, we opened our first Best Buy branded store in Turkey, located in Izmir.
In the fourth quarter of fiscal 2011, we announced plans to exit the Turkey market and restructure the Best Buy branded
stores in China during fiscal 2012. The exit from the Turkey market includes exiting of all current operations in that
country, including its two Best Buy branded stores. Restructuring activities in China include closing all eight Best Buy
branded stores. We also intend to explore other more profitable growth options for the Best Buy brand in China, including
the option to reopen two of the closed stores at a later date.
In order to align our fiscal reporting periods and comply with statutory filing requirements in certain foreign jurisdictions,
we consolidate the financial results of our Europe, China, Mexico and Turkey operations on a two-month lag. Consistent
5