Appliance and electronics retailer Best Buy Co., Inc. (Minneapolis, Minnesota, U.S.) agreed to acquire Pacific Sales Kitchen and Bath Centers, Inc., a privately owned retailer of high-end home improvement products that operates 14 showrooms in Southern California. Best Buy hopes to close on the approx. U.S. $410 million deal in mid-January 2006, after which Pacific Sales would operate as a wholly owned, indirect subsidiary of Best Buy. Best Buy does not expect the transaction to change its fiscal 2006 earnings.
"This acquisition enhances our ability to grow with an attractive customer base and premium brands using a proven and successful showroom format," said Brian Dunn, president of Retail - North America for Best Buy. "Utilizing the existing store format, we expect to expand the number of stores in order to capitalize on the rapidly growing high-end segment of the U.S. appliance market. Pacific Sales' world-class team has built an impressive business, as evidenced by its 15-percent average revenue growth the past 5 years."
Pacific Sales, based in Los Angeles, caters to home-remodeling customers and sells premium kitchen appliances brands that include Viking, Sub-Zero and Kitchen-Aid. Other product categories include plumbing fixtures, home entertainment and home furnishings. Other brands include Kohler, Hansgrohe, Sony, and Pioneer Elite. Pacific Sales employs about 350 people, including a non-commissioned sales force, and it expects to generate revenue of approximately $320 million in calendar year 2005.
"We have a high regard for Pacific Sales' employees, their culture, and their valued relationships with customers, vendors, contractors and remodelers," Dunn said. "They have a strong service-oriented approach, which is an excellent fit with Best Buy's culture and customer-centric direction."
Jerry Turpanjian, Pacific Sales' founder, president and CEO, plans to retire from his current role at the close of the acquisition and continue as a retained consultant to the business. David Sheek, general manager, and Glenn Merlian, vice president and operations manager, are to remain with the company in their current roles. In addition, Phil Lee, an 11-year Best Buy veteran who is currently senior vice president of Magnolia Audio Video, will head the Pacific Sales management team and focus on its growth strategies.
"This is an exciting new chapter for Pacific Sales," said Turpanjian. "With Best Buy's experience and resources, we are highly confident in their ability to replicate our unique operating model, expand our brand and create new opportunities for Pacific Sales employees."
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