Best Buy 2005 Annual Report Download - page 19

redesigned logo are more representative of Magnolia our financial objectives. In fiscal 2004, we sold our
Audio Video’s image as an upscale retailer of high-end interest in Musicland. The transaction resulted in the
consumer electronics. transfer of all of Musicland’s assets other than a
distribution center in Franklin, Indiana, and selected
International Segment nonoperating assets. The sale of our interest in Musicland
has allowed us to focus on our core businesses, which are
Our International segment was established in connection our primary growth and profit drivers. Musicland’s
with our acquisition of Canada’s Future Shop Ltd. in fiscal financial results have been classified separately as
2002. The Future Shop acquisition provided us with an discontinued operations in our consolidated financial
opportunity to increase revenue, gain market share and statements for all periods presented.
leverage our operational expertise in consumer electronics
retailing. Since the acquisition, we have continued to Acquisitions
build on Future Shop’s position as the leading consumer
electronics retailer in Canada. During fiscal 2003, we All four acquisitions discussed above were accounted for
launched our dual-branding strategy in Canada by using the purchase method. Under this method, net assets
introducing the Best Buy brand. We believe the Canadian and results of operations of those businesses were
market can successfully support both brands. included in our consolidated financial statements from
their respective dates of acquisition. We have not made
Geek Squad any major acquisitions since acquiring Geek Squad in
fiscal 2003. However, we have begun exploring the
In fiscal 2003, we acquired Geek Squad, Inc. Geek opportunity of expanding outside of North America,
Squad provides residential and commercial computer including China. On April 27, 2005, we announced our
support services. We acquired Geek Squad to further our plans to open lab stores in select major cities in China in
plans of providing technology support services to the next 12 to 18 months.
customers. At the end of fiscal 2005, Geek Squad service
was available in all U.S. and Canadian Best Buy stores, General Development of Business
as well as in six stand-alone Geek Squad stores. Geek
Squad’s operations were a small part of our fiscal 2005 During our fiscal year ended February 26, 2005, there
business. However, our goal is to build Geek Squad into were no significant changes to our corporate structure or
North America’s largest provider of in-home computer material changes in our mode of conducting the business.
repair, support and installation services, and we believe Unless otherwise noted, the following discussion relates to
that over time it will become a more significant continuing operations only.
component of our business. At the end of fiscal 2005, we
employed nearly 7,000 Geek Squad agents and plan to Financial Information About Segments
add another 5,000 agents during fiscal 2006. In
During fiscal 2005, we operated two reportable
addition, on April 27, 2005, we announced our plans to
segments: Domestic and International. The Domestic
open 20 to 50 stand-alone Geek Squad stores during the
segment is comprised of U.S. Best Buy and Magnolia
next 12 to 18 months.
Audio Video operations. U.S. Best Buy stores offer a wide
variety of consumer electronics, home-office products,
Musicland
entertainment software, appliances and related services.
We acquired Musicland Stores Corporation in fiscal Magnolia Audio Video stores offer high-end audio and
2001. The original strategy behind our Musicland video products and services. The International segment is
acquisition was to bring Best Buy’s core competencies in comprised of Future Shop and Best Buy operations in
retailing consumer electronics to new customer segments, Canada. Future Shop and Canadian Best Buy stores offer
including segments typically underserved by our Best Buy
stores. However, the Musicland acquisition did not meet
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