Best Buy 2013 Annual Report Download - page 8

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8
Store Development
Domestic Segment
During fiscal 2013 (11-month), we closed 47 U.S. Best Buy stores, 1 U.S. Best Buy Mobile stand-alone store and 1 Magnolia
store while opening 105 U.S. Best Buy Mobile stand-alone stores. We continue to offer Geek Squad support services, as well as
the Best Buy Mobile store-within-a-store experience, in all U.S. Best Buy stores. In fiscal 2014, we currently expect to close an
additional five to ten U.S. Best Buy stores and open a small number of U.S. Best Buy Mobile stand-alone stores.
International Segment
Best Buy Europe opened 122 new stores and closed 126 stores in fiscal 2013 (11-month). Our small-format stores in Europe
tend to have a greater number of store openings and closings compared to our other store formats, as we continually reposition
and resize stores in certain markets and locations in order to optimize overall performance. In the remainder of our
International segment, we opened 40 new stores and closed 21 stores. Store closures were primarily driven by Future Shop and
Best Buy branded stores in Canada. Store openings were primarily driven by Best Buy Mobile Canada and Five Star. We offer
Geek Squad support services in all Best Buy branded stores and within select The Carphone Warehouse and The Phone House
stores in the U.K and Spain, as well as similar Connect Pro branded services in Future Shop stores. We offer the Best Buy
Mobile store-within-a-store experience in all Best Buy branded stores in Canada, with a similar Cell Shop branded concept in
the majority of Future Shop stores. The Best Buy Mobile store-within-a-store experience is also offered in select Five Star
stores in China. In fiscal 2014, we currently expect to open a limited number of small-format stores in Europe, while continuing
to review our portfolio of Best Buy stores across all geographies.
Refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, for tables
reconciling our Domestic and International segment stores open at the end of each of the last three fiscal years.
Intellectual Property
We own or have the right to use valuable intellectual property such as trademarks, service marks and tradenames, including, but
not limited to, "Best Buy," "Best Buy Mobile," "The Carphone Warehouse," "Dynex," "Five Star," "Future Shop," "Geek
Squad," "Init," "Insignia," "Magnolia," "mindSHIFT," "Pacific Sales," "The Phone House," "Rocketfish," and our "Yellow Tag"
logo.
We have secured domestic and international trademark and service mark registrations for many of our brands. We have also
secured patents for many of our inventions. We believe our intellectual property has significant value and is an important factor
in the marketing of our company, our stores, our products and our websites.
Seasonality
Our business, like that of many retailers, is seasonal. Historically, we have realized more of our revenue and a large portion of
our earnings in the fiscal fourth quarter, which includes the majority of the holiday shopping season in the U.S., Europe,
Canada and Mexico, than in any other fiscal quarter.
Working Capital
We fund our business operations through a combination of available cash and cash equivalents, short-term investments and
cash flows generated from operations. In addition, our revolving credit facilities are available for additional working capital
needs, for general corporate purposes and investment opportunities. Our working capital needs are typically greatest in the
months leading up to the holiday shopping season as we purchase inventory in advance of expected sales.
Competition
Our primary competitors are consumer electronics retailers, including vendors who offer their products direct to the consumer,
internet-based businesses, wholesale clubs, discount chains and home-improvement superstores.
Some of our competitors have low cost operating structures and seek to compete for sales primarily on price. In addition, in the
U.S., online-only operators are exempt from collecting sales taxes in certain states. We believe this advantage will continue to
be eroded as sales tax rules are re-evaluated at both the state and federal level. We carefully monitor pricing offered by other
retailers and continuously adjust our pricing and promotions to maintain our competitiveness. Beginning in March 2013, we
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