BestBuy closing 50 stores

[Smokey]

http://img.ibtimes.com/www/data/images/full/2012/03/29/255131-a-best-buy-store-in-westminster-colorado-june-27-2007.jpg

Best Buy has fallen on hard times in a sluggish economy, suffering a dismal drop in sales and an overall $1.2 billion loss over the last fiscal year. The electronics giant announced Thursday that it will close 50 stores and cut 400 jobs at its Richfield, Minn., corporate headquarters, hoping to save $800 million over the next three years in order to stay afloat.

While the company performs damage control, it faces an uphill climb with steep competition from Wal-Mart and Amazon. Wal-Mart, without question, beats out its competitors when it comes to low prices. The company is able to do this by providing cheaply imported goods manufactured at low-cost in countries like China.

Its electronic goods are cheap, but limited, which is where Best Buy, as an electronics-centered business, has the upper hand.

As for Amazon, it is able to deliver products at competitively low prices using the Internet rather than physical stores, which suck up a significant amount of revenue to maintain. Here again, Best Buy is beat on affordable prices, and for some customers, the convenience of making purchases online is a plus. Selection is wide and they can search for they want without having to deal with crowds or checkout lines.

But the value of physically seeing a product, testing it, and taking it home the same day cannot be underestimated, which Best Buy can leverage against its online rival.

Best Buy Closings: How Apple, Wal-Mart and Amazon Are Killing The Electronics Retail Giant - International Business Times (http://www.ibtimes.com/articles/322053/20120330/best-buy-closings-wal-mart-apple-amazon.htm)

[Hyfi]

Interestingly enough, this biased story also neglects to mention that they are opening 50 stores in China at the same time.

[TheHills44060]

I saw a program on TV stating that Best Buy opened a bunch of stores in China 5 or 6 years ago then closed every single one within just a few years. One BB exec. said that they were ahead of the curve and China was not ready for a store like Best Buy haha.

[Hyfi]

I saw a program on TV stating that Best Buy opened a bunch of stores in China 5 or 6 years ago then closed every single one within just a few years. One BB exec. said that they were ahead of the curve and China was not ready for a store like Best Buy haha.

They are now apparently. I was watching CNN while getting my car washed 2 weeks ago while they reported the story of the closings here along with all the openings there. Just think, they now can buy their own junk.

[Mash]

unless that is what the customer wants. They can, for example, make really nice leather jackets in China, but I will also admit that my US-made leather jackets are far nicer than those Chinese jackets and this is obvious even from 200 ft away. But how many in the US are willing to pay for the finer quality? Not very many, especially for things which are quickly made obsolete.

There are two problems with manufacturing in China:

1. It is almost impossible to protect your proprietary technology. Sooner or later new Chinese companies will spring up that somehow have & use your proprietary technology. You will have to discover this for yourself.

2. Some of the product manufactured in China for a foreign company will 'leak out the back door' as supplies for Chinese street vendors.

An additional problem arises when a foreign company is successful in selling to the Chinese in China: When direct Chinese competitors do finally materialize, and they will, they will take away the foreigner's business. I do not forsee a long sales career for BB in China.

[Smokey]

They are now apparently. I was watching CNN while getting my car washed 2 weeks ago while they reported the story of the closings here along with all the openings there. Just think, they now can buy their own junk.

As oppose to Walmart, BB also sell alot of electronic items from Japan and Korea which would make their price slightly higher than what Chinese market offer. BB stores in China probably more cater to middle and upper class than the working masses.


An additional problem arises when a foreign company is successful in selling to the Chinese in China: When direct Chinese competitors do finally materialize, and they will, they will take away the foreigner's business. I do not forsee a long sales career for BB in China.

Chinese market seem to be very protective of foreign competition. For example, their domestic TV manufactures dominate 75% of market share in China. That give very little room for foreign TV manufactures to compete.

[LeRoy]

Man, my feelings about BB may be politically incorrect but in my estimation all the BB stores can close and that would be fine with me. The only thing I ever buy is DVD's and only when at sale prices. Otherwise I have no use for BB or Magnolia.

One thing that ticks me off about BB is their rewards card program. I have all these reward points saved up but can't use them at the store. BB wants me to use them for online purchases so f-em!

I now shop for DVD's at Target and occasionally at Wal-Mart.

[Mash]

They must be worth something.................. before they go away (with BB).

I seem to recall that Condemmer Reports pointed out that only 27% of CC airline points are actually redeemed for flight tickets. This would be an unrewarding reward program.

I use a CC with very straight forward CASH rewards ... I can spend that cash (i.e a rebate) anywhere or let it accumulate..... there are no points or complicated month to month special categories nor other gimmics, etc. I use this CC for most purchases, not only for the rewards and online ease, but because checks are no longer the freebie they once were and cash simply dissapears from my wallet without a trace.

[LeRoy]

Hey there Mash,

Ya, your right. Since I have the points I should use them but I try to keep my cc use to minimum for online purchases. I guess I am just stubborn. Since I find myself, or used to anyway, at the BB counter for making purchases I felt there was no reason why my points could not be applied during the sales transaction. I guess I am just stuck on some old school thought process and don't want to play their game.

[Mash]

It is a matter of collecting what you are owed.

[recoveryone]

Two stores in my area are closing within the next 60 days, Ontario, ca and Moreno Valley store

[Mash]

Can Best Buy Turn Things Around? (http://www.marketintelligencecenter.com/specialreports/1344103)

Electronics retailer Best Buy (BBY) used to be a leader in its industry, but over the past four or five years its business has steadily dwindled, leaving many analysts to wonder if there is any way for the company to turn things around and return to its former glory.


Tuesday, we got another indication of just how bad things have gotten for Best Buy, with the announcement that the company's CEO, Brian Dunn, is stepping down from his position. Dunn has lead the company since mid 2009, but has been unable to right the ship. One of the biggest fumbles that took place during his time as CEO took place last year when the company was unable to deliver some goods that were purchased online on Black Friday. Not only was the company unable to deliver the goods, they failed to notify consumers until just a few days before Christmas. In a world where more and more shopping is taking place online, the last thing Best Buy needed was a hit to reputation of its online business.


Best Buy is in serious danger of becoming the latest big box retailer to go under. For people that think Best Buy is too big to go down, you just have to remember the fate of Borders, or Circuit City. When Circuit City went down, questions were already being asked about the future of Best Buy and unfortunately there is little reason to believe that Best Buy will be able to avoid the same fate. The biggest problem for Best Buy is that it is having a hard time figuring out its own identity. The company used to be a pure electronics dealer, but in recent years it has been trying to boost revenues with appliances and furniture.


The writing has been on the wall for some time now. It has already announced plans to close stores, and put more attention to remodeling some of its aging stores, but whether that will be enough to bring the company back to life remains to be seen.


The marketplace has changed, and Best Buy has lost most, if not all, of its relevancy. Its stores are big, and consumers that once appreciated the bigness of Best Buy stores now have grown to hate it. We live in a faster world, and the idea of looking through big stores for the product we want is not nearly as appealing as it used to be. The internet has changed the game, and consumers are able to do their research at home, no longer needing to have someone at Best Buy run down the features of the 100 televisions that they have hanging on their walls.


Some argue that Best Buy is doomed because people are more likely to buy products online, but that is not entirely true. While there are some products where this is true, such as CDs or DVDs, there are others where it is not so. Televisions and stereos are perfect examples. While we all know that we can save a few bucks buying our next big screen TV online, we also know that it is sometimes easier to run out and just buy one in a local store as opposed to ordering online and waiting on shipping, and hoping that nothing happens during shipment to our homes. Best Buy could capitalize on this, but the main problem goes back to the fact that their stores are just too big and poorly laid out.


The one bright side to all of this is that Best Buy is starting to realize this itself. A couple weeks ago it announced plans to close 50 of its big stores, while at the same time opening up 100 small-format stores. This will be a crucial move for the company, and perhaps the only move that has any chance of saving its life. People want to get in and out, and a smaller store will help facilitate this.


Can Best Buy save itself? There is a greater chance of failure than success at this point, but it is definitely not a certainty that the company will go under. If it can streamline its stores, and put focus back solely on electronics it has a chance to turn things around. It will never be a leader in appliances, or furniture… it is electronics, and only electronics where it has any advantage what-so-ever over its competition. It is hard to imagine a world without Best Buy… but the same thing could have been said for Circuit City just a few years ago.


What are your thoughts on Best Buy? Do you still shop in Best Buy stores for your electronics, or have you turned to the internet or other smaller, more focused electronic retailers?

[Smokey]

While we all know that we can save a few bucks buying our next big screen TV online, we also know that it is sometimes easier to run out and just buy one in a local store as opposed to ordering online and waiting on shipping, and hoping that nothing happens during shipment to our homes. Best Buy could capitalize on this, but the main problem goes back to the fact that their stores are just too big and poorly laid out.

Another problem might be that they just got too much overhead with sale persons.

As it was mentioned, poeple already do their own product research on line and pretty much know what they want. They don't need a sale persons (at least in most cases) to point them to the right product or explain the product. Maybe they should rethink Geeksquad also.

Also reducing inventory just to electronics (instead of appliances) is a good approach too.