Best Buy 2008 Annual Report Download - page 14

averaged approximately 1,400 retail square feet. Products and services — Only Future Shop stores carry
Collectively, Best Buy Mobile stand-alone stores totaled appliances. In addition, Geek Squad service is available
approximately 13,000 retail square feet at the end of in all Canada Best Buy stores, but is not available in
fiscal 2008, or less than 1% of our retail square footage. Future Shop stores.
At March 1, 2008, we operated seven Geek Squad stand- Store size — At the end of fiscal 2008, the average
alone stores in California, Colorado, Georgia, Minnesota Future Shop store was approximately 26,600 retail
and Texas that averaged approximately 2,000 retail square square feet, compared with an average of
feet. Collectively, Geek Squad stand-alone stores totaled approximately 33,200 retail square feet for Canada
approximately 14,000 retail square feet at the end of Best Buy stores. Canada Best Buy stores generally have
fiscal 2008, or less than 1% of our retail square footage. wider aisles, as well as more square footage devoted to
entertainment software.
International Segment In fiscal 2007, we acquired a 75% interest in Five Star,
Our International segment was established in connection one of China’s largest appliance and consumer electronics
with our acquisition of Canada-based Future Shop Ltd. in retailers. We made the investment in Five Star to further
fiscal 2002. The Future Shop acquisition provided us with our international growth plans, to increase our knowledge
an opportunity to increase revenue, gain market share and of Chinese customers and to obtain an immediate retail
leverage our operational expertise in consumer electronics presence in China. We have a contractual commitment to
retailing. Since the acquisition, we have continued to build acquire the remaining 25% interest in Five Star within the
on Future Shop’s position as the leading consumer next several years, subject to Chinese government
electronics retailer in Canada. approval.
During fiscal 2003, we launched our dual-branding In fiscal 2007, we opened our first China Best Buy store in
strategy in Canada by introducing the Best Buy brand. The Shanghai. We plan to open five to eight additional Best
dual-branding strategy allows us to retain Future Shop’s Buy stores in China during fiscal 2009.
brand equity and attract more customers by offering a In fiscal 2008, we expanded Geek Squad to the United
choice of store experiences. As we expand the presence of Kingdom through our relationship with CPW.
Best Buy stores in Canada, we expect to gain continued
operating efficiencies by leveraging our capital At March 1, 2008, we operated 131 Future Shop stores
investments, supply chain management, advertising, throughout all of Canada’s provinces and 51 Canada Best
merchandising and administrative functions. Our goal is to Buy stores in seven provinces: Alberta, British Columbia,
reach differentiated customers with each brand by giving Manitoba, Nova Scotia, Ontario, Quebec and
them the unique shopping experiences they desire. The Saskatchewan. Collectively, our stores in Canada totaled
primary differences between our two principal brands in approximately 5.2 million retail square feet at the end of
Canada are: fiscal 2008, or about 11% of our total retail square
footage. In fiscal 2008, our Canada stores generated
In-store experience — The customer’s interaction with average revenue of approximately $30.9 million per store.
store employees is different at each of the two brands.
At March 1, 2008, we operated 160 Five Star stores in
Future Shop stores have predominantly commissioned
seven of China’s 34 provinces and one China Best Buy
sales associates who take a more proactive role in
store in Shanghai. Collectively, our stores in China totaled
assisting customers. Through their expertise and
approximately 5.9 million retail square feet at the end of
attentiveness, the sales associate drives the transaction.
fiscal 2008, or about 12% of our total retail square
In contrast, Canada Best Buy store employees, like
footage. In fiscal 2008, our China retail stores generated
employees in U.S. Best Buy stores, are
average revenue of approximately $8.8 million per store.
noncommissioned, and the stores offer more interactive
displays and grab-and-go merchandising. This design As previously announced, we plan to open two to five Best
allows customers to drive the transaction as they Buy stores in Mexico in the second half of fiscal 2009 and
experience the products themselves, with store project that we will open one or two Best Buy stores in
employees available to demonstrate and explain Turkey in the early part of fiscal 2010.
product features.
6