Best Buy 2005 Annual Report Download - page 20

products and services similar to those offered by U.S. Best Operations
Buy stores. However, Canadian Best Buy stores do not U.S. Best Buy
carry appliances.
U.S. Best Buy stores follow a standardized and detailed
Additional information regarding our ‘‘Segment operating procedure called our Standard Operating
Performance’’ is included in Item 7, Management’s Platform (SOP). The SOP includes procedures for
Discussion and Analysis of Financial Condition and inventory management, transaction processing, customer
Results of Operations, of this Annual Report on relations, store administration, product sales and services,
Form 10-K. In addition, selected financial data for our and merchandise display. All stores function in exactly the
segments is available in Note 10, Segments, of the Notes same manner under the SOP. Further, in conjunction with
to Consolidated Financial Statements, included in Item 8, the transformation to our customer centricity operating
Financial Statements and Supplementary Data, of this model, we are testing a new Adaptive Operating Platform
Annual Report on Form 10-K. (AOP). The AOP decentralizes authority and allows the
Reference is also made to Item 7A, Quantitative and person closest to the customer to make informed
Qualitative Disclosures About Market Risk, of this Annual decisions. Under the AOP, there are variations in product
Report on Form 10-K for a discussion regarding the risks offerings, staffing, promotions and store design.
associated with foreign operations. U.S. Best Buy store operations are organized into three
divisions. Each division is divided into regions and is
Domestic Segment under the supervision of a senior vice president who
Overview oversees store performance through regional vice
presidents. Regional vice presidents have responsibility for
U.S. Best Buy a number of districts within their respective region, each
At February 26, 2005, we operated 668 U.S. Best Buy of which is managed by a district manager. District
stores in 48 states and the District of Columbia that managers monitor store operations and meet regularly
averaged approximately 42,300 retail square feet. with store managers to discuss merchandising, new
Collectively, U.S. Best Buy stores totaled approximately product introductions, sales promotions, customer loyalty
28.3 million retail square feet at the end of fiscal 2005, programs, employee satisfaction surveys and store
or about 90% of our total retail square footage. For fiscal operating performance. Similar meetings are conducted at
2005, U.S. Best Buy retail stores generated average the corporate level with divisional and regional
revenue of approximately $38.6 million per store. management. Our President — Retail, North America,
has overall responsibility for retail store processing and
Magnolia Audio Video operations, including labor management. Each district
also has a loss prevention manager, with product security
At February 26, 2005, we operated 20 Magnolia Audio personnel employed at each store to control physical
Video stores in California, Washington and Oregon that inventory losses. Advertising, merchandise buying and
averaged approximately 9,700 retail square feet. pricing, as well as inventory policies for U.S. Best Buy
Collectively, Magnolia Audio Video stores totaled stores, are centrally controlled.
approximately 194,000 retail square feet at the end of
fiscal 2005, less than 1% of our total retail square U.S. Best Buy stores are generally open 78 hours per
footage. For fiscal 2005, Magnolia Audio Video retail week, seven days a week. A store is typically staffed by
stores generated average revenue of approximately one general manager and four to five assistant managers.
$6.9 million per store. The average staff per store in fiscal 2005 was
approximately 120 employees and varied by store
depending on sales productivity.
4