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Best Buy sells off final remnants of failed UK business

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Best Buy 86th street new york (STOCK)
Best Buy 86th street new york (STOCK)

It's been over a year since Best Buy shut down its retail stores in the UK, but the company today announced it will sell its 50 percent share in its Best Buy Europe joint venture with Carphone Warehouse to its partner for £500 million ($775 million). Best Buy says it made the decision to sell its stake partly to "simplify its business" and to strengthen its balance sheet, but will pay £29 million ($45 million) to Carphone Warehouse as part of its termination agreement.

Best Buy Europe launched its first store in May 2010, opening a total of 11 stores across the UK, with plans to open up 200 outlets across Europe. In November 2011, the two companies decided to shut down their retail operation after an unprofitable year, with Best Buy reported to have bought out Carphone Warehouse's stake in the Best Buy Mobile venture — which was doing well in the US at the time. It marks the end of Best Buy's failed entry into the UK market — following other big name UK retailers including Comet and Jessops (which has since reopened) — and is likely to affect its financial reports moving forward, thanks to an expected $200 million impairment charge associated with today's agreement. Shareholders still have to approve the deal, but the buyout is expected to close by the end of June.