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Best Buy IMPLODES: 400 Layoffs, 50 stores closing

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G

Ghost_Protocol

Member
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.

Acknowledging the change, Best Buy Chief Executive Brian Dunn said the company would vastly alter its strategy from its long time big box format to boost returns.

"These changes will also help lower our overall cost structure," Dunn said. "We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices — which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line."

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.

The company is betting its future largely on mobile and the commission it is paid by wireless carriers to activate services . By 2016 it hopes to have as many as 800 mobile-only locations, up from 305 today.

In November, the Richfield, Minnesota, based company bought out Carphone Warehouse's stake in it's U.S. cellular operations for $1.3 billion and said it would close its U.K. big-box locations to focus on smaller mobile outlets.

Early results from the unit have been promising. Comparable store sales improved 20 percent within Best Buy's mobile division during the fourth quarter while connections revenue increased 13 percent.
Click to expand...

Source: Yahoo finance


Whose going to choose to pay higher prices and deal with annoying salesman when you can avoid both by going to amazon?
 
K

Kinitari

Black Canada Mafia
Ghost_Protocol said:
Source: Yahoo finance


Whose going to choose to pay higher prices and deal with annoying salesman when you can avoid both by going to amazon?
Click to expand...

Too much of the general populace still really doesn't like to buy things online, and there is always the instant gratification of leaving a store with an item.

Best Buy will shrink and restructure, but it's not going anywhere.
 
DietRob

DietRob

i've been begging for over 5 years.
Shit I was just thinking today there aren't enough electronics stores. I miss being able to walk into a store and actually see and touch things before I buy them
on Amazon
.
 
Carnby

Carnby

Member
My Best Buy Experience:

1) Go to any section

2) Can't find item

3) Can't find sales person

4) Go to different section and find sales person

5) Ask sales person for help

6) Sales person goes to computer and looks at bestbuy.com to see if item is in stock

7) Question why I even bothered going to the store instead of shopping online.
 
Ultimadrago

Ultimadrago

Member
I feel bad for those laid off, but who will weep for Best Buy?

90% of people I've spoken to on the franchise (and myself) consider it as a rip-off den.


Teh Hamburglar said:
But...I have to have my Geek Squad to clean all this malware off my virus protection-free computer!
Click to expand...

$50 dollars charged to the "Bat credit card"!
 
B

B.K.

Member
I wouldn't call it imploding. There are over 1,000 stores and 180,000 employees. 50 stores is nothing.
 
M

MetatronM

Unconfirmed Member
400 layoffs but 50 stores closing? How is that possible? That's only 8 people per store.

Or are the dozens of people at each store not counted as "layoffs?"
 
A

Askani

Member
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.
Click to expand...

Guilty...but who cares? It's just Best Buy. I'm sorry for the people losing their jobs, but that store is horrible.
 
shira

shira

Member
But who will setup my wifi and install my ram?

Consumers have been using its locations as a testing ground for products before making final purchases at competitors like Amazon and Walmart.
Click to expand...
LOL
 
E

ElectricBlanketFire

Member
jaekwon15 said:
My Best Buy Experience:

1) Go to any section

2) Can't find item

3) Can't find sales person

4) Go to different section and find sales person

5) Ask sales person for help

6) Sales person goes to computer and looks at bestbuy.com to see if item is in stock

7) Question why I even bothered going to the store instead of shopping online.
Click to expand...

What are you looking for that's so obscure that you can't find it yourself? If anything, I wish the salespeople would just leave me alone.

Anyway, I hope they keep tanking and offering bomba deals on 3DS games. I got Pilotwings Resort and Steeldiver for $5 each back in December and Kid Icarus: Uprising for $29 on launch day.
 
B

Borgnine

MBA in pussy licensing and rights management
I always liked them for buying video games day 1 because you can just pick it up and buy it like anything else. You don't have to ask someone to open up a vault and get it.
 
G

gdt

Member
The prices are usually absurd, aside from sales and week 1 sales for BRDs. Never shop there.

Go Amazon.
 
T

teruterubozu

Member
Borgnine said:
I always liked them for buying video games day 1 because you can just pick it up and buy it like anything else. You don't have to ask someone to open up a vault and get it.
Click to expand...

I hear ya. It beats buying from Gamestop/Walmart/Target with all their bullshit. Bag it and go.
 
T

Talon

Member
This is hilarious considering a friend of mine works for a market research firm, and she was extolling the virtues of Best Buy as a retail store.
 
D

DemiMatt

Member
Every time I walk into BB they give me a reason not to want to purchase from them. Last time I walked in with a small bike bag and the guy told me I had to check it in with him. As this is going on a girl walks right by us with a giant purse that you could fit 3 laptops in and he says nothing. I straight up tell him unless he asks her to check that in I'm not giving up my bag. There was then an uncomfortable silence and he asked me for my bag again, and I straight up told him, I came here to buy something and your ruining this experience for me. He then caved and let me go on. I walked up to pick up the movie I wanted, realized it was 10 dollars more than Amazon and walked the fuck out. I'm ok with waiting 2 days for my movie, game, etc without having to pay those prices and deal with their employees. Good riddance.
 
S

Sean

Banned
Consumers have been using its locations as a testing ground for products before making final purchases at competitors like Amazon and Walmart.
Click to expand...

This is what I did with my last HDTV purchase. Checked it out in store at Best Buy, but purchased it on Amazon.

Was literally like $600 cheaper on Amazon, with "white glove delivery" service meaning they carry it up the stairs and can even unbox it/set it up etc. And no annoying Best Buy clerk begging you to buy some Monster Cables. (also no sales tax etc)
 
Carnby

Carnby

Member
ElectricBlanketFire said:
What are you looking for that's so obscure that you can't find it yourself? If anything, I wish the salespeople would just leave me alone.

Anyway, I hope they keep tanking and offering bomba deals on 3DS games. I got Pilotwings Resort and Steeldiver for $5 each back in December and Kid Icarus: Uprising for $29 on launch day.
Click to expand...

Miss the point much?

My Best Buy Experience (appendage):

1) call Albany store to see if item is in stock.

2) no one answers

3) call back, get connected to Saratoga store.
 
C

ChiTownBuffalo

Either I made up lies about the Boston Bomber or I fell for someone else's crap. Either way, I have absolutely no credibility and you should never pay any attention to anything I say, no matter what the context. Perm me if I claim to be an insider
There is a hot half-Asian chick that works at my Best Buy with a tri-force wrist tatt.

I will ask her out tonight.
 
B

BigDug13

Member
BestBuy is garbage. The same exact model 47" Sony LCD at Frys for $1600 was $2400 at BestBuy (a few years ago for those of you doing the "per inch" math). My dad has called it WorstBuy for years for a reason.
 
M

megashock5

Member
teruterubozu said:
I hear ya. It beats buying from Gamestop/Walmart/Target with all their bullshit. Bag it and go.
Click to expand...

Every great once in a while you can get a great deal on games they're clearing out. I paid $5 for ExciteBOTS a few years back. Can't beat that.

I also bought my two HDTVs from them. I liked having 30 days to bring it back if I wasn't happy, and they weren't any less on Amazon at the time.
 
N

nVidiot_Whore

Banned
They have over 1,000 locations... and as the report shows, their financials are still pretty damn sound... amongst some pretty big failures internationally that cost them big.

Closing less than 5% of their retail locations.. plans to replace them with 500 more "mobile" locations in the next 4 years.. laying off less than 1/5th of 1 percent of their work force.. which will easily all be replaced by the Mobile expansion.

It's certainly a sign of a shift.. but hardly an "implosion."

This is the same doom and gloom exaggerated crap everyone on the web was doing last year with the Netflix news.

The retail vs. online sales will continue to shift.. but it's not a "dying" scenario, it's a market shift. In the meantime companies like Amazon want to move INTO the retail store business..
 
shira

shira

Member
Anyone know what happens in Canada? It is idiotic having a Future Shop next to a Best Buy. I assume those are going away.
 
W

WeAreStarStuff

Member
jaekwon15 said:
My Best Buy Experience:

1) Go to any section

2) Can't find item

3) Can't find sales person

4) Go to different section and find sales person

5) Ask sales person for help

6) Sales person goes to computer and looks at bestbuy.com to see if item is in stock

7) Question why I even bothered going to the store instead of shopping online.
Click to expand...

This is the Best Buy experience that I know, except sometimes the computer says it is in stock but they still can't find it.
 
S

Shadow Hog

Member
MetatronM said:
400 layoffs but 50 stores closing? How is that possible? That's only 8 people per store.

Or are the dozens of people at each store not counted as "layoffs?"
Click to expand...
I'm going to assume they'll try to reassign people from the closed stores to stores that will remain open, as needed.
 
M

Mudkips

Banned
Kinitari said:
Too much of the general populace still really doesn't like to buy things online, and there is always the instant gratification of leaving a store with an item.

Best Buy will shrink and restructure, but it's not going anywhere.
Click to expand...

Too much of the general populace still really doesn't like to buy things online, and there is always the instant gratification of leaving a store with an item.

Circuit City will shrink and restructure, but it's not going anywhere.
 
R

RobotMafia

Banned
They have had some pretty good game deals lately, but that is pretty much the only thing I shop there for (and most of that is online anyway).
 
S

Sol..

I am Wayne Brady.
I don't like purchasing large objects online. i'm sure my postman hates it more than I do. Dude almost died trying to deliver an exercise bike for my roommate.
 
E

Escape Goat

Member
Sol.. said:
I don't like purchasing large objects online. i'm sure my postman hates it more than I do. Dude almost died trying to deliver an exercise bike for my roommate.
Click to expand...

They dont send it through regular mail. And the UPS/Fed Ex people do it because thats what they were hired to do!
 
M

MightyHedgehog

Member
I wonder how the crumbling brick 'n mortar retail industry is going to affect online retail competitiveness for pricing. With less serious competition to worry about, there's even less incentive to cutting their margins back and less reason to excel at customer service. It's like a snake eating its tail or something as we've come back to a new, but old corporate retail pyramid.
 
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