Best Buy to cut costs, open and close stores
#1
Senior Member
Thread Starter
Best Buy to cut costs, open and close stores
If there is a better place to post this, please let me know, I looked, and no section seemed to fit!
So, will they end up trying to close most of their stores someday? How can you shop for a TV without seeing the screen? I know, jumping the gun...
Also, at least one grammatical error in this yahoo article...
http://finance.yahoo.com/news/best-b...132515482.html
So, will they end up trying to close most of their stores someday? How can you shop for a TV without seeing the screen? I know, jumping the gun...
Also, at least one grammatical error in this yahoo article...
http://finance.yahoo.com/news/best-b...132515482.html
#2
Moderator
Re: Best Buy to cut costs, open and close stores
This would really suck if they closed the store by me. It was nice to be able to get hands off experience with a product before I went home and ordered it on Amazon.
#3
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
I went into a Best Buy this weekend for the first time in months. Not the BB I remember, the layout was screwed up, products weren't liked up with the sales tags. Really not worth my time.
#4
Re: Best Buy to cut costs, open and close stores
I went into Best Buy for the first time in years when they had used DVD trade in deal going. I was surprised by how they changed everything around the store. I don't know the reason why I always knew where to go and then it was like I couldn't find anything.
Best Buy has had some deals that rivaled Amazon, especially that Gamer Zone coupon to get Arkham City for $5. But overall, Amazon is the way to go.
Best Buy has had some deals that rivaled Amazon, especially that Gamer Zone coupon to get Arkham City for $5. But overall, Amazon is the way to go.
#5
DVD Talk Hero
Re: Best Buy to cut costs, open and close stores
This strategy worked out really well for Circuit City.
#7
DVD Talk Legend
Join Date: Apr 2002
Location: Formerly known as Groucho AND Bandoman/Death Moans, Iowa
Posts: 18,295
Received 372 Likes
on
266 Posts
Re: Best Buy to cut costs, open and close stores
I've been going to BB pretty regularly lately, but it's to use my Viggle Best Buy gift certificates to buy Amazon gift cards. So I'm probably not doing them any good.
#8
Banned by request
Re: Best Buy to cut costs, open and close stores
No offense, and I feel sad for the employees getting canned, but FUCK Best Buy. I go fairly regularly, especially recently when shopping for my new TV, but their knowledge sucks ass and their prices are too damn high. I ended up getting my 60" from Amazon for $500 less and free shipping. I know they're the last game in town, but I feel since they know that, that gave them constant license to do whatever the hell they wanted.
#9
DVD Talk Reviewer & TOAT Winner
Re: Best Buy to cut costs, open and close stores
It's almost impossible to shop for a TV now. Best Buy doesn't have the remotes out for most of their TVs, and you usually can't see anything on them except for their demo feed (which I've heard now comes from DirecTV, looks a little better than the compressed HD video from hard drives they were using before.) Next time I buy a TV I may end up taking home several in order to determine which one is best and return the rest. I read something recently saying electronics stores in general have been getting too many customer returns, but this is why.
#10
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
Good riddance. The few times I went into one of their stores, the prices were all much higher than Amazon's.
#11
DVD Talk Godfather
Join Date: Oct 2003
Location: Home of 2013 NFL champion Seahawks
Posts: 52,659
Received 1,016 Likes
on
840 Posts
Re: Best Buy to cut costs, open and close stores
If there is a better place to post this, please let me know, I looked, and no section seemed to fit!
So, will they end up trying to close most of their stores someday? How can you shop for a TV without seeing the screen? I know, jumping the gun...
Also, at least one grammatical error in this yahoo article...
http://finance.yahoo.com/news/best-b...132515482.html
So, will they end up trying to close most of their stores someday? How can you shop for a TV without seeing the screen? I know, jumping the gun...
Also, at least one grammatical error in this yahoo article...
http://finance.yahoo.com/news/best-b...132515482.html
More from Forbes:
http://www.forbes.com/sites/laurahel...profitability/
3/29/2012 @ 1:42PM |54,999 views
Best Buy Cutting 50 Stores To Get Profitable. Good Luck With That.
Best Buy is closing 50 superstores and focusing on mobile in an effort to reduce expenses. But since when is cost cutting to profitability a successful retail strategy?
Since never.
The electronics chain announced it would shutter 50 stores and concentrate on smaller stores selling mobile electronics. There will be 100 more of these locations by the end of this year and two markets — San Antonio, Texas and the Twin Cities — will receive remodeled superstores dubbed “Connected Stores.”
"In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Brian J. Dunn, CEO of Best Buy. “As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability.
In so many ways, it feels like a shell game. The kind that companies use to deflect negative attention by waving their arms and yelling, “look over here!” Changing things up, reducing its footprint and getting out of too large or otherwise unfavorable locations is important and probably needed to be done long ago. But these changes look more like an olive branch to the financial community: a restructuring to reduce costs.
In order to be more efficient and align the company with the opportunities that will provide the greatest returns, the company is taking significant actions to lower its cost base (via) $800 million in cost reductions by fiscal 2015; including approximately $250 million in fiscal 2013.
Management estimates a $300 million savings from the store closures and another $300 million in corporate reductions — Best Buy is also laying off 400 people at its Minneapolis headquarters.
Cost cutting its way to profitability.
The store changes seem mild and hardly innovative enough or broad enough to jump start a flailing retail model. Nor is it a new cycle for Best Buy.
In the late 1990′s as it was eagerly nipping at Circuit City’s heels, Best Buy downsized its stores from 55,000 sq. ft. to 45,000 sq. ft. The older and larger stores were merchandising exercise equipment, long runs of magazine racks and gas grills, as management tried to boost sales per sq. ft.
It wasn’t long after that management began investing in smaller formats. Best Buy even bought Musicland, ostensibly for its many small store locations in markets that couldn’t support a Best Buy superstore. That was a big disaster, as management later admitted.
Analysts believe Best Buy is doing the right thing. Right or wrong, at least Best Buy is doing something. Sometimes the bigger thing to do is go small, but a retailer still has to sell more stuff, not just jettison the people and locations that are supposed to help it do just that.
Best Buy Cutting 50 Stores To Get Profitable. Good Luck With That.
Best Buy is closing 50 superstores and focusing on mobile in an effort to reduce expenses. But since when is cost cutting to profitability a successful retail strategy?
Since never.
The electronics chain announced it would shutter 50 stores and concentrate on smaller stores selling mobile electronics. There will be 100 more of these locations by the end of this year and two markets — San Antonio, Texas and the Twin Cities — will receive remodeled superstores dubbed “Connected Stores.”
"In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Brian J. Dunn, CEO of Best Buy. “As part of our multi-channel strategy, we intend to strengthen our portfolio of store formats and footprints — closing some big box stores, modifying others to our enhanced Connected Store format, and adding Best Buy Mobile stand-alone locations — all to provide a better shopping environment for our customers across multiple channels while increasing points of presence, and to improve performance and profitability.
In so many ways, it feels like a shell game. The kind that companies use to deflect negative attention by waving their arms and yelling, “look over here!” Changing things up, reducing its footprint and getting out of too large or otherwise unfavorable locations is important and probably needed to be done long ago. But these changes look more like an olive branch to the financial community: a restructuring to reduce costs.
In order to be more efficient and align the company with the opportunities that will provide the greatest returns, the company is taking significant actions to lower its cost base (via) $800 million in cost reductions by fiscal 2015; including approximately $250 million in fiscal 2013.
Management estimates a $300 million savings from the store closures and another $300 million in corporate reductions — Best Buy is also laying off 400 people at its Minneapolis headquarters.
Cost cutting its way to profitability.
The store changes seem mild and hardly innovative enough or broad enough to jump start a flailing retail model. Nor is it a new cycle for Best Buy.
In the late 1990′s as it was eagerly nipping at Circuit City’s heels, Best Buy downsized its stores from 55,000 sq. ft. to 45,000 sq. ft. The older and larger stores were merchandising exercise equipment, long runs of magazine racks and gas grills, as management tried to boost sales per sq. ft.
It wasn’t long after that management began investing in smaller formats. Best Buy even bought Musicland, ostensibly for its many small store locations in markets that couldn’t support a Best Buy superstore. That was a big disaster, as management later admitted.
Analysts believe Best Buy is doing the right thing. Right or wrong, at least Best Buy is doing something. Sometimes the bigger thing to do is go small, but a retailer still has to sell more stuff, not just jettison the people and locations that are supposed to help it do just that.
#12
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
Best Buy is also putting 60% more money into training associates this year as part of the plan. That should work to the customers' advantage. I don't see that mentioned anywhere.
#13
DVD Talk Limited Edition
Re: Best Buy to cut costs, open and close stores
What type of training can we expect though? If it's new ways to up sell customers into replacement plans, or explaining why the $80 HDMI cables are better then the $2 one on Amazon, we're all doomed.
#15
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
I don't think them allocating 60% more money (60% more than what, exactly?) to "train" associates is going to help spiffy up their image as a customer friendly, non-pushy shopping experience. It's what the chain is known for. They can't rectify that and make it work at this point.
One of their bigger mistakes was remodeling all their stores to the jumbled messes they are now. If it ain't broke, don't fix it. They don't listen to that model.
I mainly just want to see the list of stores. There are 5 close to me that I can think of off the top of my head. One of them has got to be going.
#16
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
Typical DVDTalkers. Bitch, bitch, bitch that associates are young, stupid & untrained, then roll your eyes when adding money to try and train associates is brought up.
I guess we'll just have to see how it all shakes up. I know I can't defend my company here, so I won't even try.
I guess we'll just have to see how it all shakes up. I know I can't defend my company here, so I won't even try.
#17
Senior Member
Thread Starter
Re: Best Buy to cut costs, open and close stores
No offense, and I feel sad for the employees getting canned, but FUCK Best Buy. I go fairly regularly, especially recently when shopping for my new TV, but their knowledge sucks ass and their prices are too damn high. I ended up getting my 60" from Amazon for $500 less and free shipping. I know they're the last game in town, but I feel since they know that, that gave them constant license to do whatever the hell they wanted.
#18
DVD Talk Platinum Edition
Re: Best Buy to cut costs, open and close stores
And if Best Buy goes the way of the dinosaur, do you think Amazon will feel the need to sell TV's as cheaply as they do know? I'm sure part of their long term goals is to get rid of their main competition, so they can jack prices up. Then when it's just them and Wal mart, why compete? Where will the suckers go then???
#19
DVD Talk Hero
Re: Best Buy to cut costs, open and close stores
But for sure Best Buy closing or even having less sales would up the price of DVDs, Blu Rays, and games. Amazon rarely comes up with it's own sales on these kinds of things anymore (at least anything worthwhile... I'm not counting the non-Xmas time Lightning deals and such) and just match BB, Target, and other retailers. And sometimes BB is the only one with decent DVD/Blu sales.
#20
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
Best Buy seemed to go downhill when they eliminated the competition (Circuit City, Media Play (which I loved, even though they were high priced) and others). I won't shed a tear when they're gone...I actually haven't even been INSIDE one since probably 2009. I remember a day, though, where they were the ONLY store I could find DVDs at.
#21
DVD Talk Reviewer & TOAT Winner
Re: Best Buy to cut costs, open and close stores
Best Buy was one of the causes of putting Tower Records and other dedicated media stores out of business (one Best Buy here was close to a Virgin Megastore and just KILLED them on prices), now they're becoming a worse place to shop for said media than they were before. The owners of a local chain of record stores here have been saying they expect their business to go up eventually since stores like Best Buy are de-emphasizing media. Fry's is still a great place to shop for DVDs though.
#22
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
Best Buy seemed to go downhill when they eliminated the competition (Circuit City, Media Play (which I loved, even though they were high priced) and others). I won't shed a tear when they're gone...I actually haven't even been INSIDE one since probably 2009. I remember a day, though, where they were the ONLY store I could find DVDs at.
My shopping habits have shifted over the years so I don't go in to Best Buy enough to warrant any sort of feelings of hoping they close. Less competition is never good, but when you're the only big-box nationwide electronics retailer left, what is their competition? They hold a monopoly and are now facing stiffer pricing from stores that don't necessarily cater to just electronics.
The chain's not going to go under any time soon, but closing stores and refocusing their business model to spend 60% more of some unknown number on training and educating isn't going to help them. I could be wrong. I seem to remember Circuit City and CompUSA doing the exact same thing before they folded.
#23
DVD Talk Limited Edition
Re: Best Buy to cut costs, open and close stores
The BB here seems to be well organized despite having greatly reduced size Media section, and that seems to lead to other music related frustrations. I might go in to buy a music CD because i "want it now", except they don't have it in stock. I don't wanna ask someone because they'll just point me to Bestbuy.com. Honestly, if I wanted it order it online, I would have just fired up Amazon.com.
I remember when Best Buy launched their website, it was a mess. I actually told people to search for music/movies on Amazon.com because it had a far superior search function.
#24
DVD Talk Hero
Re: Best Buy to cut costs, open and close stores
It wouldn't surpise me at all if, in a five years, Best Buy will become a chain of mall stores selling cell phones, laptops, tablets, printer ink, gaming consoles, and other smaller items. They will still keep a handful of bigger stores open that sell TVs and major appliances, re-branded Best Buy Superstores, but those will be few and far between.
#25
DVD Talk Legend
Re: Best Buy to cut costs, open and close stores
It wouldn't surpise me at all if, in a five years, Best Buy will become a chain of mall stores selling cell phones, laptops, tablets, printer ink, gaming consoles, and other smaller items. They will still keep a handful of bigger stores open that sell TVs and major appliances, re-branded Best Buy Superstores, but those will be few and far between.
I could actually see that happening though. They could kill the car stereo department and very few would miss it at this point. The appliance section is probably a good money maker and does take up a good amount of space. Get rid of both media sections which are loss leaders and their footprint would be greatly reduced.