Carphone Warehouse on Tuesday outlined an initial £90m investment plan for its joint venture with Best Buy of the US to build a European chain of shops selling consumer electronics goods under the Best Buy name.

At the same time, it issued a second quarter trading statement saying it had focused on gaining market share at the cost of weakening margins, as the economic environment worsened.

Charles Dunstone, chief executive, said he expected headline earnings per share to be 4p to 4.2p for the first half year, to the end of September. Last year the group reported earnings per share of 4.97p for the first half.

Shares in the group, which have halved since it announced the 50:50 joint venture with Best Buy in May, rose 4¼p to 150½p on the news, issued at 1pm London time.

CPW said the first "big box" Best Buy Europe stores would open next year in the UK. It is putting its 2,430 stores into the joint venture, in return for a £1.1bn payment from Best Buy, but the new business plans to open much larger stores, of 30,000 sq ft or more, selling a far wider range of goods.

The chain will be a new rival for groups such as DSG International and Kesa, both of which have reported that the trading environment is tough. Best Buy Europe believes that "customer experience is often poor" in existing electronics shops and said: "We intend to introduce a differentiated proposition with a strong emphasis on service".

It aims to double sales and operating profits from the retail business between the year to March 2008 and the year ending March 2013, with the CPW revenues and profits as a base. It is predicted to make a post tax return on investment in the mid-teens per cent.

The joint venture plans £40m of capital spending in the year to March 2010, with start up costs of £20m in the current financial year and £30m the following year.

It said that the exact costs would depend on timing, and be funded from the joint venture's existing facilities.

CPW said that its retail business had increased connections by 9 per cent in the second quarter, taking the rise for the first half to 11 per cent.

While the new Apple iPhone boosted sales, subscription margins were lower, continuing the first quarter trend. Pre-pay handsets sales rose only 2 per cent, with the increase for the first half down to 8 per cent.

The group said its business selling mobile phones in Best Buy stores in the US, and now Canada, had traded strongly. Standalone shops had opened selling mobiles which were "delivering promising results".

In its broadband business, which is outside the new joint venture, CPW said it added 41,000 customers in the second quarter, in line with the first quarter rise. CPW had already slashed its forecast for new broadband customers for this financial year from 400,000 to between 200,000 and 250,000.

CPW said it had been focusing on retaining existing customers rather than "aggressive customer recruitment". A further 106,000 customers were moved over the CPW's own network taking the total to more than 2m, 73 per cent of their customers. The move to its own network makes the customers more profitable for CPW.