News: Best Buy in Rotherham set to close as owner pulls the plug

Best Buy's 45,000 sq ft store at Parkgate in Rotherham is set to close by the end of the calendar year, putting around 100 jobs at risk.

Best Buy Europe announced that all 11 of their UK stores would close but stated that it is confident that it will be able to offer alternative roles to the large majority of the employees affected, within other areas of its UK business.

Best Buy accounts for around 21% of the U.S. consumer electronics market and the family of brands and partnerships collectively generates more than $45 billion in annual revenue.

Best Buy joined with Carphone Warehouse in 2008 to create Best Buy Europe, and to launch the Best Buy brand in the UK. They have been operating 11 "Big Box" stores on a trial basis but they have not been profitable.

In fact, the business incurred operating losses of £62m in the year ended March 31 2011 and £47m in the six months to September 30 2011. The company's board estimate that the group's share of the total net cash investment from the failed venture will be in the region of £100m.

Roger Taylor, CEO of Carphone Warehouse, said: "The eleven Best Buy UK "Big Box" stores have performed exceptionally at the level of customer satisfaction, but they do not have the national reach to achieve scale and brand economies.

"Due to the lack of visibility of an acceptable rate of return on historical and future potential investment we have decided against rolling out more "Big Box" stores and we will be closing our existing stores, subject to consultation with our employees.

"Our immediate focus is our people and we are confident that the large majority will be offered alternative positions elsewhere in our UK business."

The first Best Buy store in Yorkshire opened in Rotherham in June, taking the former Homebase store at Parkgate Shopping. It created around 100 new jobs.

The intention is to complete the closure of all stores by the end of the calendar year and the group is to focus on their Carphone Warehouse stores.

Andrew Harrison, CEO of Best Buy Europe, said: "After conducting a thorough strategic review of our operations, we believe that our capital investment and "connectivity" strategy should be prioritised within our Carphone Warehouse stores as they offer a higher and proven rate of return.

"The technology world has changed substantially since 2008 and we are confident we will best serve our customers by investing in a single brand and format rather than two.

"We are very proud of our Best Buy team members. They have been exceptionally committed and have delivered fantastic customer service. Our immediate focus is on ensuring that they are offered new opportunities within Carphone Warehouse and Geek Squad, where they will help us deliver a best-in-class customer experience."

Best Buy website

Images: bestbuy.co.uk