[BertramCooper]

http://www.bloomberg.com/news/2012-0...-retailer.html

Best Buy Co. founder Richard Schulze, who stepped down as chairman this year, offered to take the electronics retailer private at $24 to $26 a share. Best Buy shares surged as much as 34 percent in early trading. Credit Suisse Group AG, Schulze’s financial adviser, is confident it can obtain financing for an offer, according to a letter sent to the board today. The offer is at least 36 percent more than Best Buy’s closing price Aug. 3, and the midpoint of the range gives the company an equity value of $8.5 billion. Schulze, who held more than 20 percent of Best Buy as of June, plans to contribute $1 billion in equity from that stake, the letter shows. The rest of the money will come from what the letter calls “premier private-equity firms with deep experience in retail who are interested in a possible acquisition of Best Buy” and debt financing. The Richfield, Minnesota-based electronics chain had about $1.7 billion in long-term debt as of May 5, according to regulatory filings.

More at the link.

Thoughts?

[entrement]

That's a lot of debt.

[planar1280]

This was the only thing which could save the company

[Alucrid]

They need to sell more geek squad PS3 firmware updates.

[R2D4]

That's a lot of debt.

Better sell more HDMI cables.

[Cipherr]

Its a good look if they have a good plan to change things. Alot of changes will have to be made to make them successful, taking it private might allow them to make those changes without easier, or at least with less stress from the outside.

[Tobor]

“I have been actively exploring all available options for my ownership stake,” Schulze, 71, said in the letter. “That exploration has reinforced my belief that bold and extensive changes are needed for Best Buy to return to market leadership and has led me to the conclusion that the company’s best chance for renewed success will be to implement these changes under a different ownership structure.”

Such as? They're already on a long term plan to shrink the stores and focus on mobile, that's not bold and extensive enough?

[shinobi602]

Huh, strange. I thought these were selling well.

[judhudson]

Huh, strange. I thought these were selling well.

You're kidding, right?

Right?...

I haven't stepped foot in Best Buy in years...Guess that trend will continue.

[BertramCooper]

If Best Buy is still around in a decade, it's probably going to look an awful lot like Radio Shack.

[Deadly Cyclone]

I use Best Buy for most of my purchases. Where the hell would I go if they go away? Amazon is great, but I dislike waiting or paying extra shipping. Plus then I have to find time to go to the UPS place and pick up whatever I ordered.

[bkfount]

If only more companies were private.

Everything is about squeezing profits from customers and grinding employees into the ground instead of treating them right. Retail will only continue to be fucked by online sales, and the only thing they have in their favor is the experience you get from a store.

[bjork]

Best Buy's day in the sun has long passed. If the changes aren't incredibly huge, they're going to go the way of Circuit City. But what can they do? They don't carry much in the way of DVDs and CDs any more, many locations around here have tons of empty floor space going to waste, so what is the answer? Remodel the stores so they have the same merchandise in a smaller space but also have a restaurant or something?

[gcubed]

I use Best Buy for most of my purchases. Where the hell would I go if they go away? Amazon is great, but I dislike waiting or paying extra shipping. Plus then I have to find time to go to the UPS place and pick up whatever I ordered.

i live in the Philadelphia suburbs, I can get quite a lot of things from Amazon, same day delivery for less then going to the best buy in my town. I do use Best Buy for things that I am unsure about due to the ease of returning in store.

[BobLoblaw]

Huh, strange. I thought these were selling well.

Offensive, but not nearly as offensive (to me)as their monster cables stuff.

[Kano On The Phone]

I use Best Buy for most of my purchases. Where the hell would I go if they go away? Amazon is great, but I dislike waiting or paying extra shipping. Plus then I have to find time to go to the UPS place and pick up whatever I ordered.

It's like you're using a different version of Amazon than everyone else.

[slit]

Best Buy's day in the sun has long passed. If the changes aren't incredibly huge, they're going to go the way of Circuit City. But what can they do? They don't carry much in the way of DVDs and CDs any more, many locations around here have tons of empty floor space going to waste, so what is the answer? Remodel the stores so they have the same merchandise in a smaller space but also have a restaurant or something?

Will you be the guinea pig and taste test Best Buy's version of Jambalaya?

[Razek]

Huh, strange. I thought these were selling well.

Wow, only one online account? They couldn't be bothered to even offer more?

[Keru_Shiri]

Best Buy's day in the sun has long passed. If the changes aren't incredibly huge, they're going to go the way of Circuit City. But what can they do? They don't carry much in the way of DVDs and CDs any more, many locations around here have tons of empty floor space going to waste, so what is the answer? Remodel the stores so they have the same merchandise in a smaller space but also have a restaurant or something?

May not be a bad idea. Anecdotal, but I know a lot of folks who like to simply go in and browse. A small internet cafe/restaurant. of sorts could be a good way to monetize off of that, and seeing other customers using stuff like tablets could push impulse buys.

[SillyEskimo]

Six months ago my local Best Buy used to give me shit about price matching Amazon. Now they price match without question pretty much anything I put in front of them. They have gotten more of my business lately because of that.

[Mango Positive]

Offensive, but not nearly as offensive (to me)as their monster cables stuff.

I only use monster cables... with my guitar rig. I bought 4 cables 15 years ago. I've traded them all in several times each when they stopped working, but I haven't purchased a guitar cable since.

That said, gigging with cables is different than plugging them into your TV and leaving them there.

[Deadly Cyclone]

It's like you're using a different version of Amazon than everyone else.

How so? I order a good deal from there, but unless I do the free (longer) shipping it costs extra. I either have to wait and then go pick it up anyways from UPS after work, or pay more to get it sooner, but still have to go pick it up.

I like Amazon, I just use it more for things on sale or things I cant wait a week to get.

[BertramCooper]

How so? I order a good deal from there, but unless I do the free shipping it costs extra. I either have to wait and then go pick it up anyways from UPS after work, or pay more to get it sooner, but still have to go pick it up. I like Amazon, I just use it more for things on sale or things I cant wait a week to get.

Get Prime. And get it shipped to work.

[Interfectum]

walked into a best buy the other day to show my wife the macbook retina. hadn't been in one in years. don't plan on going back anytime soon.

amazon has destroyed most retail stores for me.

[massoluk]

Best Buy recommended my landlord a $70 Monster HDMI cable. That's all I have to say about "BEST" Buy.

[greatestjediever]

Wow, only one online account? They couldn't be bothered to even offer more?

I'm sure offering to set up more than one online account with tiered pricing was in the cards, but they were having a hard enough time setting up the first one.

[Tobor]

If Best Buy is still around in a decade, it's probably going to look an awful lot like Radio Shack.

That's the current plan, and it's a solid one, which is why I don't understand this move. Does he have a better idea, and if so, what is it?

[ToxicAdam]

I make all my purchases from hhgregg (midwest/florida) now. They don't seem so scummy and actually have knowledgable employees (at least at my location).

[Enron]

Isn't hhgregg really shitty? Like, really really shitty? I always had the impression they were worse than CC or BB.

[BertramCooper]

That's the current plan, and it's a solid one, which is why I don't understand this move. Does he have a better idea, and if so, what is it?

Maybe he wants to maintain the current store size but just close a shitload of stores. I dunno.

[Baggatoast]

Will you be the guinea pig and taste test Best Buy's version of Jambalaya?

Fry's Electronics's broccoli and cheese soup is pretty good.

[ToxicAdam]

Isn't hhgregg really shitty? Like, really really shitty? I always had the impression they were worse than CC or BB.

Well, it is a big box electronics store (that sells mattresses?!). So, it can only be so good. But I have never seen a reason why you would consider them 'shitty'. Unless you can't stand salespeople that work on commission.

[bjork]

Will you be the guinea pig and taste test Best Buy's version of Jambalaya?

Not me. But the formula seems to have worked (at least for now) for Barnes and Noble.

[Deadly Cyclone]

Get Prime. And get it shipped to work.

Debating prime, but that's still me paying extra when I could just drive over to Best Buy. Can't ship to work, they don't allow personal mail to come here.

[Skiptastic]

I make all my purchases from hhgregg (midwest/florida) now. They don't seem so scummy and actually have knowledgable employees (at least at my location).

Lucky you. I avoid hh gregg like the plague because their employees don't seem to know all that much and they seem to hover like flies around you while you're shopping. Only go in there if I know they can be bargained down (which, I found out, they can!) to an internet price and I want the item now.

[BertramCooper]

Debating prime, but that's still me paying extra when I could just drive over to Best Buy. Can't ship to work, they don't allow personal mail to come here.

Prime pays for itself in like 3-4 purchases. Plus, you get some okay-but-not-amazing instant videos thrown in.

That sucks that you can't ship it to work, though. Give your boss a nice swift kick in the balls (or ladyparts).

[jossueinacoma]

Huh, strange. I thought these were selling well.

lolz, this sign is from 3 years ago (date at the botton of sign) and they would probably stop selling this if people would stop buying it.

[Duane Cunningham]

Best Buy Co. founder Richard Schulze, who stepped down as chairman this year, offered to take the electronics retailer private at $24 to $26 a share. Best Buy shares surged as much as 34 percent in early trading.

At which point Schulze cashed in his own shares. '"Suckers", Schulze added with a chuckle.

[Lmo911]

Well, it is a big box electronics store (that sells mattresses?!). So, it can only be so good. But I have never seen a reason why you would consider them 'shitty'. Unless you can't stand salespeople that work on commission.

I have to agree, I've never really had a "bad" hhgregg experience. If I was to compare them to anything it would be like a really big Sears Appliance Center from the days when Sears was "good." They're just kind of there, but not offensively so.

As for Best Buy going private? Good for them! Seems investors/shareholders are the bane of modern business. They force you to cut quality for the sake of profit to the point you go out of business and then run away when nothing but a dead husk is left. I'm not saying Best Buy didn't help dig it's own grave, but it will be easier to change course without them.

[BertramCooper]

Micro Center is my preferred Best Buy-style electronics store.

There's only like 20 of them in the entire country, though.

[bill0527]

Best Buy's day in the sun has long passed. If the changes aren't incredibly huge, they're going to go the way of Circuit City. But what can they do? They don't carry much in the way of DVDs and CDs any more, many locations around here have tons of empty floor space going to waste, so what is the answer? Remodel the stores so they have the same merchandise in a smaller space but also have a restaurant or something?

This.

Brick-and-Mortar retail is over except for one-stop places like Wal-Mart.

[Emily Chu]

I use Best Buy for most of my purchases. Where the hell would I go if they go away? Amazon is great, but I dislike waiting or paying extra shipping. Plus then I have to find time to go to the UPS place and pick up whatever I ordered.

for electronics ?

newegg...

[ToxicAdam]

This. Brick-and-Mortar retail is over except for one-stop places like Wal-Mart.

There's always going to be a place for someone to survive. Lots of people still go there to look at items they might buy online. People still last minute shop for gift giving. People still need to buy accessories for the 'big ticket items'.

I don't think the immediacy that B&M provides will ever be fully replaced.

[BertramCooper]

There's always going to be a place for someone to survive. Lots of people still go there to look at items they might buy online. People still last minute shop for gift giving. People still need to buy accessories for the 'big ticket items'. I don't think the immediacy that B&M provides will ever be fully replaced.

But for the most part, that's a niche that can be fairly easily filled by the Walmarts/Targets/Costcos of the world.

[CharlieDigital]

I hadn't purchased anything in a Best Buy in years when I stopped in there on an "emergency" a few weeks back to purchase a hard drive (was on site with a new employee and needed to transfer a 60GB VM).

They had a great deal on a Toshiba hard drive (even better price than Amazon) and was around the corner from my hotel so I went in there and picked one up.

I was pleasantly surprised at how helpful and knowledgeable the floor rep. was. I looked for the disk and couldn't find it at the advertised price. He walked over to the terminal, pulled it up on the website, confirmed the price, and found the right model (outgoing model).

He found the last one that was on sale, rung me up, and got me out of there in like 5 minutes flat.

Really impressed and made what I was thinking was going to be a terrible experience with some dude trying to up-sell me or trying to get me to buy some stupid insurance plan or some other such BS into a pleasant experience.

BTW, this was out in Lake Forest, CA.

[bill0527]

There's always going to be a place for someone to survive. Lots of people still go there to look at items they might buy online. People still last minute shop for gift giving. People still need to buy accessories for the 'big ticket items'. I don't think the immediacy that B&M provides will ever be fully replaced.

Yeah but my point is that its all going to be consolidated into one-stop shopping places like Wal-Mart Supercenters because they are the only ones that can survive because they have a wide range of products and services. Even Wal-Mart has stepped up their game and sell name brand electronics like Sony and Samsung.

And people going into places like Best Buy to look at items they might purchase online - is exactly what has killed brick and mortar. The former CEO of Best Buy said it himself - 'our biggest problem is that our customers have turned our stores into a showroom for Amazon.com'

[Prezhulio]

best buy brought me to tears with their websites monster cable reviews, so i really hope they don't disappear :(

[ToxicAdam]

But for the most part, that's a niche that can be fairly easily filled by the Walmarts/Targets/Costcos of the world.

I disagree. Unless Walmart/Target greatly expand their floor space, they can't offer the amount or variety of products that a dedicated electronics store can.

Ever try to buy electronic accessories in a Wal-mart? It's fucking dreadful.

[BertramCooper]

I disagree. Unless Walmart/Target greatly expand their floor space, they can't offer the amount or variety of products that a dedicated electronics store can. Ever try to buy electronic accessories in a Wal-mart? It's fucking dreadful.

I agree, but it's more than adequate for the average consumer.

Best Buy is basically a gigantic superstore for a niche market. It doesn't make a whole lot of sense.

[slit]

I hadn't purchased anything in a Best Buy in years when I stopped in there on an "emergency" a few weeks back to purchase a hard drive (was on site with a new employee and needed to transfer a 60GB VM). They had a great deal on a Toshiba hard drive (even better price than Amazon) and was around the corner from my hotel so I went in there and picked one up. I was pleasantly surprised at how helpful and knowledgeable the floor rep. was. I looked for the disk and couldn't find it at the advertised price. He walked over to the terminal, pulled it up on the website, confirmed the price, and found the right model (outgoing model). He found the last one that was on sale, rung me up, and got me out of there in like 5 minutes flat. Really impressed and made what I was thinking was going to be a terrible experience with some dude trying to up-sell me or trying to get me to buy some stupid insurance plan or some other such BS into a pleasant experience. BTW, this was out in Lake View, CA.

Yeah, I don't think they try to up-sell as much as they used to. I haven't had any issues with Best Buy for a while. Granted, I don't shop there very often, but I think they've toned it down. At least the ones around me have.