Best Buy eyes May UK launch; Carphone demerger

LONDON Mon Mar 29, 2010 6:42am EDT

LONDON (Reuters) - U.S. electrical goods retailer Best Buy (BBY.N) will open its first British store in May, it said on Monday, as partner Carphone Warehouse (CPW.L) completed its demerger from telecoms arm TalkTalk (TALK.L).

Best Buy said it would open a 50,000 square foot megastore in Thurrock, east of London, in May, slightly later than the April date it had previously flagged.

That will be followed by stores in Southampton, southern England and Merry Hill, central England in June, and then Liverpool in the weeks after that and Croydon, south London, in the autumn.

Best Buy, the world's biggest electricals retailer, bought 50-percent of Carphone Warehouse's retail business in 2008 and originally planned a debut in Britain in the summer of 2009.

That was delayed because of the global downturn, and while this had some advantages, by for example allowing Best Buy to snap up property at cheaper prices, it has also given rivals more time to prepare.

Earlier this month DSG International DSGI.L, which runs Currys and PC World stores, said it was speeding up its roll-out of larger stores after successful early results.

Shares in Carphone Warehouse, Europe's biggest mobile phone retailer, rose on Monday following their demerger from telecoms business TalkTalk.

One analyst said the move was helped by stronger-than-expected results from Best Buy last week, at a time when Carphone's shares were suspended ahead of the demerger.

At 1030 GMT, Carphone's shares were trading at 144.5 pence, having opened at 135 pence.

Shares in TalkTalk, Britain's second-biggest broadband provider behind BT Group (BT.L), were trading at 129 pence, up from their open at 126.6 pence.

Carphone previously argued its shares were trading at a discount to rivals because it was viewed as a conglomerate, and that splitting in two would allow management and investors to focus on the increasingly different operations.

Collins Stewart analysts believe TalkTalk could attract a takeover bid. Rivals BSkyB (BSY.L), BT (BT.L), Virgin Media VMEDL.UL and mobile phone operators like Vodafone (VOD.L) have all been cited as potential buyers.

(Reporting by Mark Potter; editing by Simon Jessop)

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