US electronics giant Best Buy is to open its first store in Ireland next year following its purchase of a 50 per cent stake in Carphone Warehouse, which already operates 70 outlets in the State.
Best Buy is the world's largest consumer electronics retailer with annual sales of more than $25.4 billion and employing more than 150,000 and has 1,314 stores.
It usually operates giant superstores of 40,000 sq ft, equivalent to a large supermarket. The number and location of the Best Buy outlets planned for the Irish market will be announced next month.
Given the size of the typical Best Buy outlet, it is unlikely that exisiting Carphone Warehouse outlets will be rebranded. Best Buy is more likely to base itself in retail parks.
Stephen Mackeral, ceo of Carphone Warehouse Ireland said the partnership would also result in an increase in the range of electrical goods stocked, prior to the opening of the Best Buy units.
Carphone Warehouse opened its 70th retail outlet in Co Roscommon today and Mr Mackeral said the company planned to open ten new stores this year.
"We are looking at a new opening in Carrickmines, one in Cork and two more in Dublin and it will be ten in total." The company employs around 500 people.
He said consumer electronics had been the fastest growing retail sector in Europe over the last five years and is worth an estimated €114.1 billion a year.
In Ireland, Mr Mackeral said Carphone Warehouse has 25 per cent of the mobile phone sales market and said he expected future growth to be led by the "convergence of entertainment, computing and communications".
Earlier today Carphone Warehouse sold a 50 per cent stake in its retail unit to Best Buy for £1.1 billion and Mr Mackeral said the funds would be used to pay down debt and for investment in retail expansion. Carphone Warehouse operates 2,400 stores in nine European countries.
The ownership of Carphone Warehouse as a corporate entity will not change and the deal does not include its broadband or telephony operation, which trades under the TalkTalk and AOL brands, or its share in Virgin Mobile France.
One key reason for the joint venture is to help Best Buy enter the European market. It is planning store openings in UK and Europe next year.
"We are joining forces with a leader in consumer electronics retailing to enter a major new market together," Carphone finance director Roger Taylor said in a statement.
Bob Willett, chief executive of Best Buy International and Chief Information officer, is expected to be chairman of the new venture.
He said the Best Buy was planning its entry into the European market carefully. "We have been successful with our business model and aspire to apply that model to one of largest markets in the world."
