Best Buy, Inc. (NYSE: BBY) CEO Brad Anderson indicated this week at the World Economic Forum in Davos, Switzerland that the largest consumer electronics retailer in the U.S. would be looking at about-to-be-vacated retail locations that are closing due to Circuit City's ongoing liquidation that's expected to run until sometime in March.
Where it makes sense, Best Buy could most likely snap up locations for smaller-format stores for its Best Buy Mobile operations or other concept stores it would like to test. It certainly will be able to acquire some former Circuit City locations on the cheap. It's a good move as the mass market consumer electronics retailer experiments with growing sales outside the standard big-box format.
Best Buy continues to be a solid pick if you're looking to add a fundamentally strong company to your holdings. It's weathering the consumer economic downturn but is not exactly shining in terms of sales or profit. With its largest independent competitor out of the way, though, Best Buy will stand high above the competition when consumer dollars return to retail -- and they will. Mass merchants like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) will always service the consumer electronics consumer, but neither has the breadth of products Best Buy has in many consumer electronics categories. One thing consumers continually indicate they want is choice. Best Buy provides that pretty well.
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Reader Comments (Page 1 of 1)
1-31-2009 @ 6:12AM
al coholic said...
I don't know, Brian. The electronics business is in transition and Best Buy's business model seems very fragile to me. Wal-Mart has successfully dragged a lot of people over to their stores who never would have considered it before.
These are the people who didn't bother to compare prices before but are now discovering that Best Buy is no longer the home of a price low enough to keep you from comparison shopping.
Most savy shoppers don't bother with Best Buy anymore because they can get a much better deal on line.
Even with Circuit City gone I think Best Buy may soon find their fortunes falling.
2-01-2009 @ 8:55PM
Kraig&Melissa said...
I was ASTONISHED yesterday on my first visit to a best buy store in a few years to find out how things have changed since the last time I was there. Gone are the pimply-faced kids who looked like they would rather be ANYWHERE else, the LOUD music blaring, and the "hit you over the head" push for those damn magazines!! I found polite, well educated and knowledgable sales people who took the time to find out why I was there, what I had seen around my search at other stores, and, most importantly, HOW I wanted it to work when I got home!! In less than 30 minutes, I learned so much about the new T.V. technology in a language I could understand (I'm over 60) that I bought a 47" LCD (I know what that means now) T.V. and how to use it! If my experience is how best buy is adapting to the current market conditions, I expect them to be around for a LONG time! Good job, best buy!! (and I'll be thinking about you watching the Super Bowl!) Go Steelers!!