The Most Important Retail Head in Europe

Earlier this week, Best Buy announced that Scott Wheway has been named CEO of Best Buy Europe - the new company created by the JV between Best Buy and The Carphone Warehouse. Wheway will take on responsibility for all of Best Buy Europe's operations, including The Carphone Warehouse's 2,450 stores across nine European countries, plus the 'big box' stores which are scheduled to be launched in the UK next year. Mr Wheway spent some 20 years in Tesco [and not just in the UK - his last posting for Tesco was in Japan], and was most recently the Managing Director of Boots the Chemist.

Microsoft Stores

Back in February, we posted a note on the appointment of David Porter as Microsoft's Corporate VP of Retail Sales. Well, now it looks as if we're moving ever closer to the opening of Microsoft's first stores in the US.

Earlier this week, Gizmodo revealed a leaked slide deck from Lippincott - a design and brand strategy consultancy. Within the body of the deck, Lippincott explained that it has been asked to assist Microsoft and its 'approved partners' with the development of a new company owned retail store that "provides a transformative customer experience, shifts current perceptions of the brand, and supports the functional operating requirements of the business groups".

As Gizmodo explains: "Essentially, Microsoft is taking the best elements from the Apple Store, Sony Style and other 'flagship' stores." There will be a Digital Media Wall which wraps around the entire store. There will be 'stage areas' for Windows 7, Windows Media Centre, and Windows Mobile. And there will be an Answers Bar or Guru Bar or Windows Bar - well, something very similar to Apple's Genius Bar.

We now learn from CNET that two stores have already been identified - one in Scottsdale, Arizona, and the other in Mission Viejo, California. It is understood that the store in Mission Viejo will be in the same mall as the local Apple Store.

Best Buy Europe

Earlier this week, The Carphone Warehouse published its Q1 2010 trading update. The division between The Carphone Warehouse's Talk Talk business and its 50% stake in Best Buy Europe is now clearer than ever. And with the launch of Best Buy Europe's 'Big Box' strategy in 2010, the disconnect between these two businesses will become even more overt. Meanwhile, total revenues for Best Buy Europe increased 6% year-on-year to £773mn, although on a constant currency basis, this increase was just 0.7%. On a like-for-like basis, revenues grew 5.4%, or just 0.2% on a constant currency basis.

Amazon Q2/09

Amazon has just published its results for Q2 2009. Overall, revenues increased by 14% year-on-year, while operating income decreased by 27%, and net income decreased by 10%. Excluding adverse exchange rates, Amazon's international segment - that's operating companies in China, France, Germany, Japan and the UK - grew revenues by 28%. At constant currency, this growth was just 16% year-on-year.

For worldwide electronics [which includes other 'general merchandise' not included elsewhere], revenues grew by 35% to $2.07bn at constant currency. Without the adverse impact of unfavourable exchange rates, this would have represented growth of 41%. This result compares very favourably with Amazon's 'traditional' media segment [books, DVDs and such like] which grew by a mere 1% year-on-year.

Logitech Q1/10

Logitech has announced its results for Q1 FY2010, and revenues are down once again, this time by 36% year-on-year [although when adjusted for constant currency, by 33%]. Logitech has continued to say that revenues have been adversely affected by de-stocking in the channel. Gerald Quindlen, CEO, said: "During Q1 we made substantial progress in helping our channel partners reset their new, lower levels of weeks of supply. While there is more progress to be made, we continue to expect this reset to be completed by the end of Q2".

Apple Brighton

This Saturday, Apple opens its 21st Apple Store in the UK. It's located in Churchill Square, Brighton on England's south coast. The store opens at 10.00, and as usual, the first 1,000 visitors will receive a free Apple T-shirt.

Elsewhere in Europe there are just 6 Apple Stores - that's 1 in Italy [Rome], 3 in Switzerland [2 in Zurich, and 1 in Geneva], and 1 in Germany [Munich]. There are rumours of further openings in Europe later this year.

Apple Q3/09

Earlier this week, Apple posted its Q3 09 results. Sales at Apple Stores increased by some 4% year-on-year, mostly due to increased iPhone revenues, and partially offset by a decrease in revenues from iPods and Macs. Apple ended the quarter with 258 stores compared with 216 stores at the end of Q3 08. Average Q3 revenues per store declined from $6.8mn in 2008 to $5.9mn in 2009. And Apple ended the current quarter with approximately 15,600 full-time equivalent employees working in their retail segment.

Multichannel Staples

Just a little over one year ago, Staples acquired Corporate Express, creating a global office products giant. Now, we learn that Staples in the UK has kicked-off a pan-European re-branding exercise, relabelling the Corporate Express business 'Staples Advantage'. So, the 'Delivery' part of Staples now has Staples Advantage for contract sales, principally to large and mid-sized corporates, and Staples Catalogue for SME/SMB customers. Then there is Staples Retail for SME/SMB customers, plus consumers.

Within Europe, Staples has a retail business in Belgium, Germany, the Netherlands, Portugal and the UK. There are two distinct retail concepts in Europe - the Staples format in the UK, Germany and Portugal; and Office Centre, a cash-and-carry membership warehouse format, in Belgium, Germany [just 2 outlets] and the Netherlands.

DSGi Verdict

Verdict Research is probably the leading firm of retail analysts in the UK, publishing numerous studies throughout the year. Verdict also produces a weekly synopsis of retail news and opinion called Retail FreeView. This week's edition includes a story centred on DSG's results which were published last week.

Verdict says that DSGi's response to continuing declines in revenues is to: "Focus on its longer-term viability by offering better service, overhauling its store portfolio, growing online sales and reducing costs". But, Verdict says that in spite of these actions, it believes that: "The Group's future looks bleak".

For PC World, Verdict explains that the company is placing more emphasis on: "Service, connectivity, delivery, installation and repair, as well as on educating its customers about converging technology". In addition, Verdict says that the Group is offering: "More technical and after sales services, such as its TechGuys proposition, and placing more emphasis on sales of subscription products, warranties and guarantees which accompany the product".

None of this is really new. For some years now, DSGi has been trying to position itself as a specialist provider, but the world has moved on. In so many ways, DSGi's competitors - be they the major grocers, other players with simpler propositions [especially John Lewis in the UK], and the pure play online retailers - offer what the consumer wants, in a format they understand, and at a price point [and margin] which is does not need to be propped up with accessories and service add-ons.

Verdict concludes its analysis by saying that: "If the retailer does not not take more decisive, aggressive and appropriate action now, it risks slipping into terminal decline, with a confused, irrelevant offer, a forever shrinking store portfolio, and customers flocking to its rivals". Ouch!