Carphone investors ring up £800m from US joint venture deal

Investors in Carphone Warehouse are set for an £800 million-plus windfall after the retailer yesterday sold out of its US mobile phone joint venture and confirmed plans to close its Best Buy electrical superstores.

Almost 1,100 jobs will be affected by the closure plans, though Carphone said it hoped to find the “large majority” alternative work within the organisation.

The 11 stores – all south of the Border – are part of Best Buy Europe, a joint venture between the US retail giant and Carphone.

The co-called “big box” outlets – launched to great fanfare in 2009 – were intended to shake up the home electronics market with cheaper prices and better customer service. However, the sector has been one of the hardest hit during the downturn, while the stores have faced intense competition from incumbent rivals Comet and Currys.

Only three years ago, when the two firms outlined plans for the megastores, they promised a chain of up to 100 outlets in Britain that would then sweep across Europe.

Carphone is selling its share in the US mobile phone joint venture with Best Buy for £838m, with £813m being returned to shareholders. Those investors include Carphone founder Charles Dunstone who holds a stake of about 29 per cent.

Best Buy, which is shrinking its US superstores in the face of stiff competition and weak consumer demand, said it would focus in Europe on Carphone’s existing smaller format stores.

The pair also unveiled a venture aimed at replicating the US Best Buy Mobile’s success in emerging markets, called Global Connect.

Citi analysts appeared relaxed about the sale of Carphone’s lucrative profit share deal in the US mobile business.

“Carphone Warehouse retains growth opportunity from the launch of Global Connect [and] a 50 per cent share in a category killer European core business,” they said.