Skip to comments.BEST BUY IMPLODES: Misses Revenue, Firing 400, Closing 50 Stores
Posted on 03/29/2012 8:06:03 AM PDT by Hojczyk
Electronics retailer Best Buy announced it would close 50 big box locations in the U.S. as it refocuses its operations around mobile.
The company said it will launch 100 new mobile locations as it retools its domestic store format. The announcement was timed with the company's fourth quarter report, where it sharply beat analyst expectations on the bottom line. Over the final quarter of 2011, revenue grew three percent to $16.6 billion while earnings per share hit $2.47.
However, analysts polled by Bloomberg had forecast top line results of $17.15 billion, some $500 million more than the company reported. The quarter also benefitted from an extra week in the company's fiscal calendar excluding the week would mean revenue actually fell 1.1 percent. Shares were down 6 percent in the first minutes of trading.
The company saw same-store sales decline 2.3 percent during the period, highlighting its difficulties as the U.S. economy gained steam during the first few months of 2012. Best Buy saw weakness across the board, with sales suffering in gaming, notebooks, digital imaging and televisions.
Best Buy has rapidly been trying to turn its operations around as it has seen peers CompUSA and Circuit City fail. Consumers have been using its locations as a testing ground for products before making final purchases at competitors like Amazon and Walmart.
Best Buy is targeting more than $800 million in cost savings by 2015, largely expected through layoffs and the aforementioned store closings. The targets are roughly split between corporate, retail and declines in costs of goods sold. The company will layoff 400 employees within its management and support channels.
(Excerpt) Read more at finance.yahoo.com ...
Best Buy sucks. There stuff is always a couple dollars more than the other places, the sales punks just stand around talking to each other and over the years they have eliminated half the stuff you go there to buy. They can screw.
BB brought this on their own. They failed to keep up with changing consumer demand and buying habits. These brick and mortar stores are going the way of the book stores as someone else noted.
Way cheaper to buy online.
Plus when you can find somebody for help, they are completely clueless.
Hmmmm. So Best Buy sees its future primarily as a purveyor of cell phones, now?
I’ve actually had GREAT experiences at three BB stores in the area near my home. Informed, helpful salespeople, great tech support department that sometimes just fixed my mistakes for free, no problems with instant returns/refunds. They have been zero headache, and I haven’t found better prices at Costco or Walmart unless I was willing to brave the riots on Black Friday morning. I like doing business with them and I hope our local Washington DC stores don’t close.
The main reason I go to Best Buy is to try out the items that I will later buy much cheaper online from someone else.
What is a computer? Those things people used to put under or on their desks?
(Kidding -kind of)
I guess it’s a function of being old, but for some things, I just want to go touch and see them before I buy them. I do shop online, but there are problems with online purchases. Most returns require repackaging, and paying shipping.
I bought my main TV from BB a year ago. Nice TV, only problem was the post sale attempts to add on junk I don’t need. $175 to come to my house and setup the color on my TV?! GTFO!
Recently I bought an LED TV for my son. They couldn’t have been less helpful. I asked where the stock was, a kid pointed to it, and walked away. Another kid just stood there looking at me, I said, well, I’ll need some sort of cart, he sighed and went to get one. I met him half way and said, I don’t want to disturb you. His reply was, it’s ok, I have to be here anyway.
BB sucks, but it’s the best brick and mortar electronics store near me. HHGreg is even worse. Sears sucks rotten eggs. I hear Frye’s is moving into the area, but no sign of them yet.
Best Buy is where people go to see products and write down the model numbers.
When they get home, they find the best price online, then purchase.
They’re their own worst enemy.
They bait and switch, they lie and they patronize otherwise informed customers.
They lost a sale to us because;
a. they intentionally mislocated the price tags and then claimed they “had no control if “someone” moved them”, and
b. they wouldn’t sell us a notebook that hadn’t already been “optimized” by their Geek Squad at an additional cost of $99. If we wanted it “de-optimized”, it would cost us $99.
Eff em. I won’t be going back.
Which is why the government is so anxious to impose internet taxes.
Amazon was $31.00, free shipping and no sales tax.
“BB is a place that I dont like going to, because the ambiance is annoying. Loud music (usually some post-modern garbage), flashing TVs, useless salespeople. Its a complete package of customer repellent!”
EXACTLY! It’s horrible just BEING in one of their stores for 15 minutes because of the racket.
best buy does not back what it sells.. you do not even have to hit the front door, once you have a reciept, you are on your own.... what? product is broken or defective? replacement? NO, but we will be happy to send it out for service, if you pay shipping..... screw them
I've a friend who drives 86 miles to work one way. His car gets around 26 miles to the gallon. He uses 6.6 gallons a day. When gas increases 30 cents a gallon he has $1.98 less in his pocket for the day. 6 day work week means $11.88 less each week to spend on food, housing, and all the other stuff one needs. That is over 600 bucks a year.
Factor in that when Obama was elected gas was around a buck ninety nationwide and now it is averaging just under four dollars.
I know we now have a fuel surcharge of 50 bucks mandated by the delivery companies on every special order we make for our business (Carpeting) use to be we could special order a 12 by 12 room of carpet and have it in your home in 2 days at a fair price. Now with the fuel surcharges it raises the price of 12' x 12' carpet installed with pad over 15%.
But hey I hear there is no inflation worries... [/s]
Their customer service is a big part of their problem. Went in there to buy a laptop and left after 30 minutes, headed to Staples where I bought it.
My wife had the same experience when she went to buy an e-reader.
That, and CC fired their most productive workers. It caused a big stink around here when the news came out.
Best Buy is making the right move, but they are a few years too late. The electronics market has changed quite a bit, but they were too fat and happy relying on profits from extended warranties and financing.
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