Best Buy Grasping at Straws 1 1 
Best Buy: Grasping At Straws
Eric Savitz, Forbes Staff, March 29, 2012
Best Buy’s gradual disappearance took a predictable next step today, as the company reported disappointing earnings and announced a new series of desperation moves to find something to hold onto even as it sinks deeper into quicksand.
As part of yet another restructuring plan, the company intends to close fifty of its big box stores and fire an additional 400 corporate staff. (Best Buy currently operates 2,900 retail locations worldwide.)
The need for the closings is obvious. Today’s final report card for last year’s financial performance included several failing grades. Revenue at established stores fell 2.4% last year, following a 4.7% decline in the previous year. Overall, the company lost $1.23 billion last year, or $3.36 per share.
Disappointed investors dumped the stock, sending it down 8% in early trading today. (It closed on Thursday down almost 6%.)
Readers of my earlier posts on cascading problems at the electronics superstore won’t be surprised to hear any of this. Nearly three months after a post-Christmas nightmare at my local Best Buy led me to conclude the company was in the early stages of going out of business, I still hear every day from customers, employees, and former executives with new horror stories.
(Just read through the comments from readers on the two posts, especially those from Best Buy executives cluelessly trying to explain that it’s the fault of uncooperative customers their “business model” isn’t working out.)
Deploying the New Killer Apps
In a conference call with investors, Best Buy CEO Brian Dunn offered several explanations for the poor performance:
Over the last three years, the industry experienced little innovation [in] many of the large traditional consumer electronics categories such as television, PCs and gaming. At the same time, consumers have enjoyed greater price transparency and ease of costs shopping. As a result, we knew we had to
Eric Savitz, Forbes Staff, March 29, 2012
Best Buy’s gradual disappearance took a predictable next step today, as the company reported disappointing earnings and announced a new series of desperation moves to find something to hold onto even as it sinks deeper into quicksand.
As part of yet another restructuring plan, the company intends to close fifty of its big box stores and fire an additional 400 corporate staff. (Best Buy currently operates 2,900 retail locations worldwide.)
The need for the closings is obvious. Today’s final report card for last year’s financial performance included several failing grades. Revenue at established stores fell 2.4% last year, following a 4.7% decline in the previous year. Overall, the company lost $1.23 billion last year, or $3.36 per share.
Disappointed investors dumped the stock, sending it down 8% in early trading today. (It closed on Thursday down almost 6%.)
Readers of my earlier posts on cascading problems at the electronics superstore won’t be surprised to hear any of this. Nearly three months after a post-Christmas nightmare at my local Best Buy led me to conclude the company was in the early stages of going out of business, I still hear every day from customers, employees, and former executives with new horror stories.
(Just read through the comments from readers on the two posts, especially those from Best Buy executives cluelessly trying to explain that it’s the fault of uncooperative customers their “business model” isn’t working out.)
Deploying the New Killer Apps
In a conference call with investors, Best Buy CEO Brian Dunn offered several explanations for the poor performance:
Over the last three years, the industry experienced little innovation [in] many of the large traditional consumer electronics categories such as television, PCs and gaming. At the same time, consumers have enjoyed greater price transparency and ease of costs shopping. As a result, we knew we had to