Electronics And Appliance Stores Sales Slip In Q2: May Cause Concern For Best Buy/Radio Shack [View article]
@ Nasir Khan,
I think Q2 will be telling. If RSH doesn't get itself turned around in Q3, then we'll see the company with one foot in the grave by Q4 of this year and then dead and buried a year from then.
Only a buyout (e.g. some analysts and pundits have been calling for Google to buy the company, and some have gone so far as to say that Richard Schulze - founder of BBY - should target RSH and not BBY) will save it if it does not start producing strong numbers in the near future.
Electronics And Appliance Stores Sales Slip In Q2: May Cause Concern For Best Buy/Radio Shack [View article]
@ smith101
Agreed - the price differential is the major factor. Without it, Amazon and Wall-Mart don't exist.
Unless Best Buy drops its store prices, the company will have a very hard time succeeding. The "two-tiered" pricing program (i.e. higher in-store prices, lower online prices) are hurting the company's brand, creates customer confusion (e.g. so this disk drive is 20% cheaper on bestbuy.com but you won't sell it to me here for the same price? I thought Best Buy was one company).
I think the company is trying to move to a "service access membership" program as outlined at the website you listed above, but BBY is completely botching the marketing and branding of the membership program. The current push is to target seniors. (AARP, granparents.com, etc). The PR campaign has got to make the public wonder. Do folks really want a service that they associate with "grannies.com"?
Thanks for the read and the reference to the website. I was thinking about doing an article about what BBY needs to do to save itself, but it looks like the website you sent already covers it.
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
@ shakazoid,
Thanks for the comment and the read. It will be interesting to see how the sales tax issue affects AMZN and what the company will look like once it establishes warehouses in every state.
BBY and other brick and mortar Consumer Electronics retailers were pushing hard to keep television prices locked at certain levels. This resulted in lower TV sales across the board.
I'm interested to see what unintended consequences the brick and mortar retail world is in for now that there is nothing stopping AMZN from establishing a physical presence near ever major US metropolitan outlet.
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
@ Rooting for jobs,
Thanks for the link. I saw the flurry of press releases today as well. Communication is key to building trust with investors, but more importantly with employees and customers.
You may want to tell the PR Guru to send a message to BBY management that they have taken Microsoft's "last to cool, first to profit" message too literally. Best Buy's recent strange obsession with seniors is getting more and more odd by the day. Mikan is constantly talking about his AARP contract and the most recent press release about the discounts the company has put together with "Grandparents.com" is sending EVERYONE the wrong message.
Movement to services via Geek Squad makes sense, but the company's implementation (from its hiring strategy, marketing strategy, etc., etc.,) is absolutely horrendous.
I had been thinking about writing an article about what Best Buy needs to do to survive, but not sure whether anyone on the current board or management team would even bother to read it...
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
@ billddrummer,
In my research of my "Circuit City" series, I saw your comments from years ago, which proves you were a once proud employee of Best Buy.
Best Buy's decision to let folks like you go, and to gut its workforce in the process is the key to its demise.
For every employee that is mistreated, there are an exponential number of potential customers that each of those employees touch. Cutting the wages and laying off 2,400 employees means not only that you've lost 2,400 potential customers, you've also potentially lost every person that each of those 2,400 people come into contact with.
For each of the four executives that got the $10 million "continuity" bonus, those individuals will have to start making lots of friends real fast to make up for the PR nightmare and word of mouth campaign that the layoffs created...
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
@ Galt Speaks,
The Financial Times did an amazing 5 story series on why the sale tax issue may have awoken the sleeping giant that Amazon currently is.
The main premise of the series is to show readers how Amazon is as much a retailer as it is an entire sales "infrastructure." Now that the sales tax issue is about to go away, the company may lose its sales tax edge, but will now no longer have any disincentive to open warehouses in every State in the Union.
Looks like Amazon won't need BBY as a showroom anymore, since it could potentially set up showrooms in every warehouse in every state it enters. Also, with fulfillment centers in every state, it will have the capability to offer the showrooms to customers that it previously lacked.
Now customers who prefer to shop online can have "instant gratification" by ordering and receiving same day delivery. Individuals with busy lives, folks who hate lines, and people who would simply rather spend more time with their family in the backyard rather than being in a store won't have to wait. Additionally, customers who want to touch, see, hear, or smell a product (AMZN sells flowers), can now stop by their local AMZN warehouse...
Links to the FT article and a Slate article describing the phenomenon are below.
billddrummer pretty much covered what I was going to write in response to your question related to the ability to borrow BBY. Another more conservative alternative would be to "short" BBY by purchasing put contracts without owning the underlying stock (i.e. buying the put to short the stock rather than using it as insurance to hedge losses of the underlying equity). I personally thought the Jan 2014 put contracts seemed especially attractive...especially in light of the possibility that AMZN might have a fulfillment center in every state before the holiday season of 2014...
I had previously been bullish on stocks like COST, WMT, and TGT...after reading the FT article series, I have serious questions about the future of the brick and mortar retailers, as we've come to understand them today.
I still think AMZN is incredibly overvalued though...which is why I think the safer bet is to be "short" companies like BBY and RSH for now. It's almost like buying AMZN stock, but only at a much lower price, and with the additional pressure those companies are feeling from retailers like WMT, TGT, and COST, could add to the pressure they are already feeling.
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
@ Apetro,
Hopefully someone in BBY corporate is reading my series on the company. One can even hope that they will do something to address the flaws in the company's current plans and the problems you and other BBY employees who are posting here are uncovering.
Rather than sitting behind their corporate desk and issuing edicts from afar the executive team absolutely has to start going out to the sales floor in different states to understand what they have just done to the company. The situation is compounded significantly by the fact that the one guy who knew retail (Richard Schulze) decided to jump ship.
I grew up in retail and watched my parents build one store into a mutli-state franchise. Our family sold the business a few years back and watched it collapse because the new owners made decisions very similar to the ones currently being made by BBY (i.e. new owners buying quick fix training tools to "help" a salesforce that already knew what it was doing, pressuring floor staff to "help" customers by upselling, etc.)
Its the fastest way to make your customers and your workers not want to walk through the door...and ultimately without that, all you have is a dying business.
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
@ retail of two cities,
Thanks for the note. My dog was pretty upset when she heard that her picture was under attack by strangers online (In my humble opinion she's a little to consumed with her appearance, but I love her none the less).
In a bold move, I've decided to change my profile picture to something even less professional, but hopefully my pup will sleep better at night!
Market Preview: Futures pare losses a bit after slightly better-than-expected - albeit unconvincing - weekly jobless claims. The S&P benchmark is -0.7%. Along with Warren Buffett, markets in the U.S. and Europe are depressed about the global economy. Meanwhile, Supervalu dives 36% after a horrible earnings report and is dragging down its rivals with it. Later: Bloomberg Consumer Comfort Index [View news story]
Jobless and unemployment claims down! Great news!
Only its probably not because the economy is getting better, but rather because more people have simply given up and have left the workforce...
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
*correction to comment above - BBY's same store sales were negative last quarter and were not increasing, therefore it is unlike Circuit City when BBY made its last decision to increase its dividend by a penny.
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
Thanks for the additional information. Great stuff to help better understand how things might play out for BBY moving forward.
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
Great information and it looks like there are more similarities between the two companies than even I had considered.
It would make a great business school case study.
Electronics And Appliance Stores Sales Slip In Q2: May Cause Concern For Best Buy/Radio Shack [View article]
I think Q2 will be telling. If RSH doesn't get itself turned around in Q3, then we'll see the company with one foot in the grave by Q4 of this year and then dead and buried a year from then.
Only a buyout (e.g. some analysts and pundits have been calling for Google to buy the company, and some have gone so far as to say that Richard Schulze - founder of BBY - should target RSH and not BBY) will save it if it does not start producing strong numbers in the near future.
Electronics And Appliance Stores Sales Slip In Q2: May Cause Concern For Best Buy/Radio Shack [View article]
Agreed - the price differential is the major factor. Without it, Amazon and Wall-Mart don't exist.
Unless Best Buy drops its store prices, the company will have a very hard time succeeding. The "two-tiered" pricing program (i.e. higher in-store prices, lower online prices) are hurting the company's brand, creates customer confusion (e.g. so this disk drive is 20% cheaper on bestbuy.com but you won't sell it to me here for the same price? I thought Best Buy was one company).
I think the company is trying to move to a "service access membership" program as outlined at the website you listed above, but BBY is completely botching the marketing and branding of the membership program. The current push is to target seniors. (AARP, granparents.com, etc). The PR campaign has got to make the public wonder. Do folks really want a service that they associate with "grannies.com"?
Thanks for the read and the reference to the website. I was thinking about doing an article about what BBY needs to do to save itself, but it looks like the website you sent already covers it.
Electronics And Appliance Stores Sales Slip In Q2: May Cause Concern For Best Buy/Radio Shack [View article]
Agreed, storm clouds are on the horizon, only a few weeks left before we see how bad the thunder and lightning will be.
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
Thanks for the comment and the read. It will be interesting to see how the sales tax issue affects AMZN and what the company will look like once it establishes warehouses in every state.
BBY and other brick and mortar Consumer Electronics retailers were pushing hard to keep television prices locked at certain levels. This resulted in lower TV sales across the board.
I'm interested to see what unintended consequences the brick and mortar retail world is in for now that there is nothing stopping AMZN from establishing a physical presence near ever major US metropolitan outlet.
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
Thanks for the link. I saw the flurry of press releases today as well. Communication is key to building trust with investors, but more importantly with employees and customers.
You may want to tell the PR Guru to send a message to BBY management that they have taken Microsoft's "last to cool, first to profit" message too literally. Best Buy's recent strange obsession with seniors is getting more and more odd by the day. Mikan is constantly talking about his AARP contract and the most recent press release about the discounts the company has put together with "Grandparents.com" is sending EVERYONE the wrong message.
Movement to services via Geek Squad makes sense, but the company's implementation (from its hiring strategy, marketing strategy, etc., etc.,) is absolutely horrendous.
I had been thinking about writing an article about what Best Buy needs to do to survive, but not sure whether anyone on the current board or management team would even bother to read it...
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
In my research of my "Circuit City" series, I saw your comments from years ago, which proves you were a once proud employee of Best Buy.
Best Buy's decision to let folks like you go, and to gut its workforce in the process is the key to its demise.
For every employee that is mistreated, there are an exponential number of potential customers that each of those employees touch. Cutting the wages and laying off 2,400 employees means not only that you've lost 2,400 potential customers, you've also potentially lost every person that each of those 2,400 people come into contact with.
For each of the four executives that got the $10 million "continuity" bonus, those individuals will have to start making lots of friends real fast to make up for the PR nightmare and word of mouth campaign that the layoffs created...
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]
The Financial Times did an amazing 5 story series on why the sale tax issue may have awoken the sleeping giant that Amazon currently is.
The main premise of the series is to show readers how Amazon is as much a retailer as it is an entire sales "infrastructure." Now that the sales tax issue is about to go away, the company may lose its sales tax edge, but will now no longer have any disincentive to open warehouses in every State in the Union.
Looks like Amazon won't need BBY as a showroom anymore, since it could potentially set up showrooms in every warehouse in every state it enters. Also, with fulfillment centers in every state, it will have the capability to offer the showrooms to customers that it previously lacked.
Now customers who prefer to shop online can have "instant gratification" by ordering and receiving same day delivery. Individuals with busy lives, folks who hate lines, and people who would simply rather spend more time with their family in the backyard rather than being in a store won't have to wait. Additionally, customers who want to touch, see, hear, or smell a product (AMZN sells flowers), can now stop by their local AMZN warehouse...
Links to the FT article and a Slate article describing the phenomenon are below.
billddrummer pretty much covered what I was going to write in response to your question related to the ability to borrow BBY. Another more conservative alternative would be to "short" BBY by purchasing put contracts without owning the underlying stock (i.e. buying the put to short the stock rather than using it as insurance to hedge losses of the underlying equity). I personally thought the Jan 2014 put contracts seemed especially attractive...especially in light of the possibility that AMZN might have a fulfillment center in every state before the holiday season of 2014...
I had previously been bullish on stocks like COST, WMT, and TGT...after reading the FT article series, I have serious questions about the future of the brick and mortar retailers, as we've come to understand them today.
I still think AMZN is incredibly overvalued though...which is why I think the safer bet is to be "short" companies like BBY and RSH for now. It's almost like buying AMZN stock, but only at a much lower price, and with the additional pressure those companies are feeling from retailers like WMT, TGT, and COST, could add to the pressure they are already feeling.
http://slate.me/LWucUo
http://on.ft.com/NLu7Fb
Amazon's Newest Victim: hhgregg [View article]
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
Hopefully someone in BBY corporate is reading my series on the company. One can even hope that they will do something to address the flaws in the company's current plans and the problems you and other BBY employees who are posting here are uncovering.
Rather than sitting behind their corporate desk and issuing edicts from afar the executive team absolutely has to start going out to the sales floor in different states to understand what they have just done to the company. The situation is compounded significantly by the fact that the one guy who knew retail (Richard Schulze) decided to jump ship.
I grew up in retail and watched my parents build one store into a mutli-state franchise. Our family sold the business a few years back and watched it collapse because the new owners made decisions very similar to the ones currently being made by BBY (i.e. new owners buying quick fix training tools to "help" a salesforce that already knew what it was doing, pressuring floor staff to "help" customers by upselling, etc.)
Its the fastest way to make your customers and your workers not want to walk through the door...and ultimately without that, all you have is a dying business.
Best Buy's 2012 Layoffs Reminiscent Of Circuit City's 2007 Layoffs [View article]
Thanks for the note. My dog was pretty upset when she heard that her picture was under attack by strangers online (In my humble opinion she's a little to consumed with her appearance, but I love her none the less).
In a bold move, I've decided to change my profile picture to something even less professional, but hopefully my pup will sleep better at night!
: D
BTW, your screen name is great!
Market Preview: Futures pare losses a bit after slightly better-than-expected - albeit unconvincing - weekly jobless claims. The S&P benchmark is -0.7%. Along with Warren Buffett, markets in the U.S. and Europe are depressed about the global economy. Meanwhile, Supervalu dives 36% after a horrible earnings report and is dragging down its rivals with it. Later: Bloomberg Consumer Comfort Index [View news story]
Only its probably not because the economy is getting better, but rather because more people have simply given up and have left the workforce...
Best Buy's Transformation - More Like Circuit City, Not At All Like Apple [View article]