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Best Buy to Start Dealing in Used Games

Best Buy BBY logoI remember 15 years ago, I rarely felt more satisfied than when I sold an unwanted CD for a decent price (still looking for someone to take that Spin Doctors album off my hands). It was also a rush to score a CD that was new (and cheap) to me, even if it had been dismissed by its former owner. That business may have suffered a precipitous fall, the trade of used goods continues to thrive among the gaming community.

Gamestop (GME) makes much of its business (27% in the last quarter, to be exact) in the used trade, and it makes good business sense. Once a consumer buys a title from, say, Electronic Arts (ERTS), the publisher has made its money. The profit from used discs goes to the seller and the middle man (which happens to be Gamestop). While used games comprised just 27% of Gamestop sales last quarter, they made up 48% of the company's gross profit.

Continue reading Best Buy to Start Dealing in Used Games

Best Buy's Q1 Profit Misses Expectations

Best Buy BBY logoEarly Tuesday morning, Best Buy (BBY) announced that its first-quarter profit increased to $155 million from $153 million a year ago. While the overall profit was slightly higher, the per-share results of 36 cents matched those from a year ago. These results fell 14 cents short of the consensus estimate.

The electronics retailer also maintained its full-year earnings of $3.45 to $3.60 per share, which surrounds the $3.50 per share expected by the Street.

Continue reading Best Buy's Q1 Profit Misses Expectations

Best Buy follows Amazon into the clouds

Best Buy (NYSE: BBY) may be the world's largest electronics retailer, but it realizes that it faces a huge threat to a hefty chunk of its business. Apple (NASDAQ: AAPL) is moving plenty of movies and other soon-to-be former DVD fare through iTunes, staking a claim on a business that once belonged to Best Buy. The big box store is getting ready to fight back (finally?).

Using technology it's licensing from Sonic Solutions (NASDAQ: SNIC), Best Buy is opening an online store for movies and television shows. Best Buy CEO Brian Dunn says this move will expand the company's presence in services and will bolster company loyalty. That's the press release version, of course. The reality is that Best Buy needed to do something to protect this portion of its revenue and probably should have made the move several years ago.

Continue reading Best Buy follows Amazon into the clouds

R.I.P., Circuit City

Circuit City Going Out of BusinessAhhh, Circuit City. Where service is state of the art! The chain of electronics retailers -- currently liquidating at a furious rate -- will be all but defunct as of Sunday, March 8. The "bulk" of the stores still left open are targeting this as their last day.

Although the chain very nearly ruined one of my favorite songs (The Cars' "Just What I Needed") by employing it as their jingle, I have a soft spot in my heart for the red-themed Big Box location. I frequented it long before Best Buy Co., Inc. (NYSE: BBY) was in my world, I bought my first laptop there, and it was my CD shopping destination of choice in the late 1990s. Thank you, Circuit City employees, for never laughing at my purchase of the latest from NSYNC, the Backstreet Boys, Mandy Moore, or others.

Continue reading R.I.P., Circuit City

Will Circuit City disappear?

Circuit City Stores Inc. (NYSE:CCTYQ) may not be long for this world.

The troubled electronics retailer said today that it has until the end of next week to reach a deal "with interested parties" or else it would be forced to liquidate. This is hardly surprising.

Circuit City filed for Chapter 11 bankruptcy protection in November after being squeezed by both the credit crunch and rivals including Best Buy Inc. (NYSE: BBY). Moreover, consumer confidence is at an all-time low making it difficult for any seller of discretionary purchases such as electronic gadgets and gizmos.



It will be a miracle if a white knight comes to Circuit City's rescue. For one thing, Best Buy, the No. 1 retailer of electronics, is struggling too. The company today narrowed its 2009 forecast because of weak sales in December Many other retailers are facing hard times and more bankruptcies are expected.

But Circuit City has been in trouble even before the economic slowdown. In March 2007, the second-largest electronics retailer gained headlines after it fired 3,400 "experienced" workers and replaced them with lower-paid less-experienced staff. It was a public relations disaster.

Not only did it make the Virginia retailer to look like a heartless employer, but it made it seem that it did not give a hoot about its customers. People like me have gadget-phobia. Anything computerized or electronic freaks us out. When are looking to buy a new gizmo, we need lots and lots of hand holding from sales people. My fellow gadget-phobes and myself are not going to take a chance of getting poor service from Circuit City.

Like many communities, we have Circuit City and Best Buy next door to one another. Guess which parking lot is usually empty.

S&P makes Best Buy a 'Best Buy'

Best Buy (NYSE: BBY) was selected by Standard & Poor's The Outlook at its "Stock of the Week," a pick that is chosen from among those stocks that earn the coveted 5-star strong buy ranking.

The Outlook notes that it expects the retailer "to benefit from strength in consumer-electronics spending and an ability to outmaneuver competitors." Here's the reasoning behind making Best Buy, American's largest specialty retailer of consumer electronics, a "best buy."

S&P states, "We think that the healthy consumer-electronics cycle will continue to propel sales and earnings growth despite an expected slowdown in consumer spending. We also think that aggressive expansion and a continued focus on service levels will allow Best Buy to increase overall market share and build loyalty with consumers."

As of March, the retailer operated 869 Best Buy stores (822 in the U.S. and 47 in Canada), and, says S&P, "While the market remains fairly fragmented, the top three players have a nearly 50% share."

Best Buy, the service notes, leads the way with an approximately 25% share, followed by Wal-Mart, Stores (NYSE: WMT) with 15%, and Circuit City Stores (NYSE: CC) with 9%. Says S&P, "Competition is fierce, and we believe that retailers who differentiate themselves, either through service, marketing, or product mix, will benefit."

Continue reading S&P makes Best Buy a 'Best Buy'

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DJIA-89.2312,801.23
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S&P 500-9.311,342.64

Last updated: February 12, 2012: 12:24 PM

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