Store Forum Share Your Shopping Experiences at Stores both Online and Off.

Best Buy Gets Rid of Musicland

Old 06-16-03, 10:14 AM
  #1  
DVD Talk Hall of Fame
Thread Starter
 
Join Date: Jan 2000
Location: Chicago, IL
Posts: 9,334
Best Buy Gets Rid of Musicland

Ha ha. Guess they realized that people won't pay MSRP (if not higher for DVDs and CDs!!!) THEY GOT NO CASH FOR THE DEAL!!

http://story.news.yahoo.com/news?tmp...hi_te/best_buy


RICHFIELD, Minn. - Electronics retailer Best Buy Co. said Monday it has shed its troubled Musicland Group, turning it over to Sun Capital Partners, a Florida-based private investment company. Best Buy shares rose.



Sun Capital Partners paid no cash but assumed all of Musicland's liabilities including its lease obligations.


Musicland operates around 1,100 Media Play, Sam Goody and Suncoast stores across the country. Best Buy said in March that it planned to sell the group.


Richfield-based Best Buy paid nearly $700 million for Minnetonka-based Musicland two years ago, but the group failed to meet Best Buy's expectations, especially in consumer electronics sales. When Best Buy decided to cut its losses, it cited a decline in CD sales and a slowdown in shopping mall traffic nationwide.


"We are energized by Sun Capital's record of restoring companies to profitability within its first year of ownership," said Connie Fuhrman, who remains president of Musicland. "The sale is positive news for our employees, customers and vendors."


Sun Capital Partners, based in Boca Raton, Fla., focuses on leveraged buyouts. Since it began in 1995, it has invested in more than 50 companies with combined sales of more than $7 billion, including retail and catalog companies Wickes Furniture, Bruegger's Bagels, Miles Kimball, The Mattress Firm and Nationwide Mattress and Furniture Warehouse.


"Musicland is the nation's leading entertainment software retailer with a strong, experienced management team and more than 10,000 dedicated, knowledgeable employees," said Jason Neimark, principal of Sun Capital. "We're excited to build on Musicland's long-standing vendor relationships, loyal customer base and technological infrastructure."


The transaction included all of Musicland's operating assets, except for a distribution center in Franklin, Ind., that Best Buy will continue to operate. Sun Capital said it will buy transition support services from Best Buy for up to one year, until Musicland develops long-term solutions.


In morning trading on the New York Stock Exchange (news - web sites), Best Buy shares were up $2.04, or 4.9 percent, to $43.80.
chanster is offline  
Old 06-16-03, 11:27 AM
  #2  
Senior Member
 
Join Date: Jan 2000
Location: Red Wing, MN USA
Posts: 389
I never understood why Best Buy bought Musicland in the first place (maybe the fact that Musicland was Minnesota based had something to do with it). Pretty embarrassing for the original promoters of the purchase - gone after only two years with nothing to show for it.
BigT is offline  
Old 06-16-03, 11:41 AM
  #3  
DVD Talk Legend
 
Join Date: Jun 1999
Location: USA
Posts: 12,201
Originally posted by BigT
I never understood why Best Buy bought Musicland in the first place (maybe the fact that Musicland was Minnesota based had something to do with it). Pretty embarrassing for the original promoters of the purchase - gone after only two years with nothing to show for it.
To take out more competition and gain new locations. In local malls near me all the Sam Goody's were closed and the Suncoast remain open.

From a corporate standpoint they probably still gained market share by simply closing stores.
Brian Shannon is offline  
Old 06-17-03, 02:23 PM
  #4  
Cool New Member
 
Join Date: May 2003
Posts: 28
Now hopefully Suncoast can become more of a competitor. BB never really helped it much. I looked into Suncoast DVD's but the BB store 1 block away even had lower prices. The only advatage of Suncoast is that it is easy to pre-order major releases and pick them up on release day. The negative side now for Suncoast is they almost always had BB promotions for DVD's, which I imagine will stop soon.
berg0449 is offline  
Old 06-17-03, 09:33 PM
  #5  
Senior Member
 
Join Date: Oct 1999
Location: Nashville, TN
Posts: 770
For a couple of years, I managed a Suncoast in the mid-90's. The Suncoast division of The Musicland Group (comprised of Suncoast, Sam Goody, On Cue, Media Play, & Musicland) was the only division turning a profit. Because they are mall-based stores and charge MSRP on most items, they kept the rest of the company afloat. During my final 9 months, they opened four Media Play stores in our city, one of which closed within a year (an affluent county that didn't want to pay less than MSRP for laserdiscs, I guess).

I think the above post was on target: closing locations decreases competition for Best Buy. Oh, and what company doesn't want a fat tax write-off for the loss?

Last edited by phraseturner; 06-18-03 at 04:06 PM.
phraseturner is offline  
Old 06-22-03, 08:25 AM
  #6  
DVD Talk Hall of Fame
 
Join Date: Mar 2001
Location: Atlanta
Posts: 7,935
I never knew MediaPlay was owned by Best Buy. Bizarre. There are two almost side by side in my neighborhood.
atlantamoi is offline  
Old 06-28-03, 01:56 PM
  #7  
New Member
 
Join Date: Jun 2003
Posts: 1
does this mean i won't be able to use my discount at sam goody and suncoast, i work at best buy, thats bs.
mumf0rd is offline  
Old 06-30-03, 03:16 PM
  #8  
DVD Talk Platinum Edition
 
Join Date: Dec 1999
Location: Michigan
Posts: 3,031
Originally posted by mumf0rd
does this mean i won't be able to use my discount at sam goody and suncoast, i work at best buy, thats bs.
I was told by by our GM that we could no longer use the discount for the other stores.

Really blows as I like getting stuff from Media Play. They always have more anime dvds then Best Buy does. Now I have to wait to see if we ever get the disks in that I need to complete some of my sets.
tjr2mental is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Thread Tools
Search this Thread

Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.