Best Buy 2008 Annual Report Download - page 18

and services to our customers. During fiscal 2008, we
Suppliers
opened 155 new stores, relocated nine stores and closed
Our strategy depends, in part, upon our ability to offer 18 stores. We offer Geek Squad support services in all
customers a broad selection of name-brand products and, Best Buy stores. At March 1, 2008, we offered the Apple
therefore, our success is dependent upon satisfactory and store-within-a-store experience in 357 U.S. Best Buy stores,
stable supplier relationships. In fiscal 2008, our 20 largest the Magnolia Home Theater store-within-a-store
suppliers accounted for just over 60% of the merchandise experience in 346 U.S. Best Buy stores and the Best Buy
we purchased, with five suppliers — Sony, Hewlett- Mobile store-within-a-store experience in 181 U.S. Best
Packard, Samsung, Apple, and Toshiba — representing Buy stores.
just over one-third of total merchandise purchased. The
The following table reconciles U.S. Best Buy stores open at
loss of or disruption in supply from any one of these major
the beginning and end of each of the last five fiscal years:
suppliers could have a material adverse effect on our
revenue and earnings. We generally do not have Total
Stores at
long-term written contracts with our major suppliers that Stores Stores End of
Fiscal Year Opened Closed Fiscal Year
would require them to continue supplying us with
Balance forward NA NA 548
merchandise. We have no indication that any of our
2004 60 — 608
suppliers plan to discontinue selling us merchandise. We
2005 61 (1) 668
have not experienced significant difficulty in maintaining 2006 74 — 742
satisfactory sources of supply, and we generally expect that 2007 80 — 822
adequate sources of supply will continue to exist for the 2008 101 — 923
types of merchandise we sell.
The following table reconciles Pacific Sales stores open at
We operate global sourcing offices in China in order to the beginning and end of each of the last two fiscal years:
purchase products directly from manufacturers in Asia.
Total
These offices have improved our product sourcing Stores at
Stores Stores End of
efficiency and provide us with the capability to offer Fiscal Year Opened Closed Fiscal Year
private-label products that complement our existing Balance forward(1) NA NA 14
product assortment. In the future, we expect purchases 2007 — — 14
from our global sourcing offices to increase as a 2008 5 — 19
percentage of total purchases. We also believe that the (1) As of the March 7, 2006, date of acquisition
expected increase in our global sourcing volumes will help
The following table reconciles Magnolia Audio Video
drive gross profit rate improvements by lowering our
stores open at the beginning and end of each of the last
overall product cost. At March 1, 2008, we operated three
five fiscal years:
of these offices, but subsequently closed our sourcing
office in Beijing. Total
Stores at
Stores Stores End of
Fiscal Year Opened Closed Fiscal Year
Store Development
Balance forward NA NA 19
The addition of new stores has played, and we believe will 2004 3 — 22
continue to play, a significant role in our growth and 2005 — (2) 20
2006 — — 20
success. Our store development program has historically 2007 — — 20
focused on entering new markets; adding stores within 2008 — (7) 13
existing markets; and relocating, remodeling and
expanding existing stores in order to offer new products
10