Best Buy Investing In Cell Phones

[caption id="attachment_4519" align="alignleft" width="300" caption="Best Buy Mobile"][/caption]

The mega electronic store Best Buy has partnered up with a cell phone company in an attempt to improve revenue and sales. Best Buy has been getting some bad publicity this past year, so there attempts to improve their products is no surprise. Mark Scott of The New York Times discusses more in his article Best Buy Pays $1.3 Billion for Cellphone Business:

LONDON — The electronics retailer Best Buy agreed on Monday to pay $1.3 billion for full ownership of a fast-growing American cellphone joint venture from its British partner, the Carphone Warehouse Group.

Best Buy also said it was abandoning plans to expand its so-called big-box stores across Europe as the sovereign debt crisis continued to weigh on consumer spending across the Continent. The company is set to close all 11 of it existing big-box stores in Britain, which employ about 1,000 people.

Under the terms of the deal, Best Buy will take full control of Best Buy Mobile, a cellphone business that has expanded rapidly in North America, partly as a result of the rise of smartphones, including the Apple iPhone. The acquisition is expected to close by March 2012, and will increase Best Buy’s pre-tax profits by up to $140 million in 2013.

“We wanted to use the Best Buy Mobile team to sell connections to consumers,” Best Buy chief executive Brian J. Dunn said on a conference call with investors. “There’s no doubt we can go faster in the U.S. and Canada to unleash the team.”

The deal ends a profit-sharing agreement with Carphone Warehouse that Best Buy signed in 2008 as it sought to expand its presence in the cellphone market. As part of the sale, both companies have the option to buy the other out of their European joint venture, Best Buy Europe, in 2015.

The two companies will continue to work together through a new venture targeted at expanding their cellphone business into emerging markets, particularly China and Mexico.

Read more at The New York Times