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video products and related services. Pacific Sales stores
PART I
offer high-end home-improvement products including
Item 1. Business. appliances, consumer electronics and related services.
Speakeasy provides broadband, voice, data and
Description of Business
information technology services. The International segment
Unless the context otherwise requires, the use of the terms is comprised of all Canada store, call center and online
‘‘Best Buy,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ in this Annual Report operations, including Best Buy, Future Shop and Geek
on Form 10-K refers to Best Buy Co., Inc. and its Squad, as well as all China store, call center and online
consolidated subsidiaries. Best Buy is a specialty retailer of operations, including Best Buy, Geek Squad and Jiangsu
consumer electronics, home office products, entertainment Five Star Appliance Co. (‘‘Five Star’’). Our International
software, appliances and related services. We operate segment offers products and services similar to that of our
retail stores and Web sites under the brand names Best U.S. Best Buy stores. However, Canada Best Buy stores do
Buy (BestBuy.com, BestBuy.ca, BestBuy.com.cn, and not carry appliances. Further, our China Best Buy store
BestBuyMobile.com), Five Star (Five-Star.cn), Future Shop and Five Star stores do not carry entertainment software.
(FutureShop.ca), Geek Squad (GeekSquad.com and
Financial information about our segments is included in
GeekSquad.ca), Magnolia Audio Video (MagnoliaAV.com),
Item 7, Management’s Discussion and Analysis of
Pacific Sales Kitchen and Bath Centers (PacificSales.com)
Financial Condition and Results of Operations, and
and Speakeasy (Speakeasy.net). References to our Web site
Note 9, Segment and Geographic Information, of the
addresses do not constitute incorporation by reference of
Notes to Consolidated Financial Statements, included in
the information contained on the Web sites.
Item 8, Financial Statements and Supplementary Data, of
Our vision is to make life fun and easy for consumers. this Annual Report on Form 10-K.
Our business strategy is to treat customers as unique
individuals, meeting their needs with end-to-end solutions, Domestic Segment
and engaging and energizing our employees to serve
We were incorporated in the state of Minnesota in 1966
them, while maximizing overall profitability. We believe we
as Sound of Music, Inc. We began as an audio
offer consumers meaningful advantages in store
components retailer and, with the introduction of the
environment, product value, product selection, and a
videocassette recorder in the early 1980s, expanded into
variety of in-store and in-home services related to the
video products. In 1983, we changed our name to Best
merchandise we offer, all of which advance our objectives
Buy Co., Inc. and began using mass-merchandising
of enhancing our business model, gaining market share
techniques, which included offering a wider variety of
and improving profitability.
products and operating stores under a ‘‘superstore’’
concept. In 1989, we dramatically changed our method of
Information About Our Segments
retailing by introducing a self-service, noncommissioned,
During fiscal 2008, we operated two reportable segments: discount-style store concept designed to give the customer
Domestic and International. The Domestic segment is more control over the purchasing process.
comprised of all states, districts and territories of the
In fiscal 2000, we established our first online shopping
United States and includes store, call center and online
site, BestBuy.com. Our ‘‘clicks-and-mortar’’ strategy is
operations, including Best Buy, Best Buy Mobile, Geek
designed to empower consumers to research and purchase
Squad, Magnolia Audio Video, Pacific Sales Kitchen and
products seamlessly, either online or in our retail stores.
Bath Centers (‘‘Pacific Sales’’) and Speakeasy. U.S. Best
Our online shopping sites offer expanded assortments in
Buy stores offer a wide variety of consumer electronics,
all of our principal revenue categories.
home office products, entertainment software, appliances
and related services. Best Buy Mobile offers a wide In fiscal 2001, we acquired Magnolia Hi-Fi, Inc. — a
selection of mobile phones, accessories and related Seattle-based, high-end retailer of audio and video
services. Geek Squad provides residential and commercial products and services — to access an upscale customer
computer repair, support and installation services. segment. During fiscal 2004, Magnolia Hi-Fi began doing
Magnolia Audio Video stores offer high-end audio and business as Magnolia Audio Video.
4