Best Buy 2001 Annual Report Download - page 23

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Best Buy Co., Inc.
24
As of M arch 3, 2001, the Company operated more than 1,700 retail stores. The Company acquired more than 1,300 stores as
part of its acquisition of Musicland and 13 stores in connection with the acquisition of Magnolia Hi-Fi. The Company opened 62
new Best Buy stores in fiscal 2001, including entries into the new markets of the N ew York City area and N orfolk, Va. Included in
the new store openings were 11 small-market stores, intended to serve markets with populations of less than 200,00 0, bringing
the total stores in this format to 20. The Company also relocated seven stores and expanded three stores during the last year. At
the end of fiscal 2001, the Company operated 419 Best Buy stores, compared with 357 stores at the end of the prior fiscal year.
In the second quarter of fiscal 2001, the Company launched its online shopping site, BestBuy.com. The Company’s clicks-and-mortar
strategy is designed to empower consumers to research and purchase products seamlessly across the Best Buy retail environment –
online or in retail stores. The online site initially offered consumer electronics products, music and movies. Later in the year, the product
offerings were expanded to include computers and related products. W hile online revenues do not currently represent a significant
portion of the Company’s business, the Company believes the investment in and increased expenses associated with the development,
launch and operation of a comprehensive Internet strategy creates a significant future growth opportunity in serving consumers both
online and in retail stores.
Fiscal 2000 revenues increased 24% to $12.5 billion, compared with $ 10.1 billion in fiscal 1999, due to an 11.1% increase in
comparable store sales, 47 new stores and a full year of operations at the 28 stores opened in fiscal 199 9. The increase in
comparable store sales reflected the continued strength in consumer spending and the Company’s ability to gain market share.
Higher levels of disposable income due to the strong economy, consumers’ rapid acceptance of digital technology products and
the increased affordability of personal computers all drove consumer demand. Internet service providers (ISPs) offered new
subscribers significant rebates on purchases of personal computers, making them more affordable. These offers stimulated unit sales
of personal computers and sales of higher-margin accessories and Performance Service Plans (PSPs).
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