Apple, Best Buy Deepen Relationship with Expanded Watch Deal, Kiosk Overhaul
Big box retailer Best Buy (BBY) will sell Apple’s (AAPL) Watch in all 1,050 of its stores by the end of September in a dramatic expansion of initial distribution plans the companies first disclosed in late July.
Best Buy chief executive Hubert Joly said on the company’s FQ2 2016 earnings call that strong demand for the Apple Watch prompted the retailer to expand the device’s availability to the full complement of its stores well ahead of schedule.
“Now because demand for Apple Watch has been so strong in these stores and online, we are excited to share that beginning September 4 we will be carrying the Apple Watch in more than 900 of our big-box stores,” Joly said. “Apple Watch will be available in all 1,050 of our big-box stores and in approximately 30 of our Best Buy Mobile Stores by the end of September.”
In late July, Apple signed a deal with Best Buy that made it the first major retailer to carry the Apple Watch, as part of the vendor’s strategic move to widen the number of third-party retail locations selling the device. On August 7, Best Buy began to carry the Apple Watch in 100 stores and at its website, with a planned expansion to an additional 200 stores by the holiday season.
Expanding the number of Best Buy outlets selling the Watch isn’t all the retailer has in mind. It also will update its Apple stores-within-stores kiosks at some 740 of its locations, adding new fixtures and additional displays for its iPhones, iPads and Macs, Joly said.
The Apple kiosk upgrades already are finished in about 350 stores, said Joly, with 170 more on the retailer’s docket to be completed by the holiday season.
Best Buy also will offer customers Apple’s AppleCare service and support package later this quarter and will pilot a program to act as an authorized Apple service provider at 50 of its stores, the company said.
The retailer currently is selling 16 Apple Watch models, including the Sport and Watch models in both 38mm and 42mm sizes along with about 50 accessories, including watch bands, screen shields, stands, chargers and more. It will not carry the high-end Apple Watch Edition, the gold-cased model priced at $10,000.
Best Buy also sells some accessories for the Watch, including cases, docking stations and screen protectors, at its online store.
For FQ2, Best Buy exceeded analysts’ expectations, posting U.S. sales of $7.9 billion, a 3.8 percent increase over this time last year, and $0.46 in GAAP earnings per share, an 18 percent year-over-year bump.