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Is it all-or-nothing for Best Buy (BBY +2%) with the company either going private or going...

Is it all-or-nothing for Best Buy (BBY +2%) with the company either going private or going bankrupt? Maybe not, says Jim Cramer. He thinks Best Buy could adopt a "muddle-through" strategy to survive as a leaner and "less profligate" company that makes money. The factoid that bites: Best Buy BBY has 3X the number of employees of Google, yet only boasts 2% of Google's market cap.
Comments (10)
  • dacama1
    , contributor
    Comments (214) | Send Message
     
    what the heck does that factoid have to do with anything?
    23 Jan 2013, 10:00 AM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    Fair point Mr. dacama1.

     

    In business school we learned that a retail jewelry store could gross 5 million a month with a staff of three while a grocery store grosses 5 million with a staff of 47.

     

    Here's the real factoid that bites: The Energy Department has 18,000 employees and doesn't produce anything.
    23 Jan 2013, 10:08 AM Reply Like
  • Valley Outsider
    , contributor
    Comments (12) | Send Message
     
    Have fun with the meltdown at the nuclear plant near your house.
    23 Jan 2013, 10:34 AM Reply Like
  • benitus
    , contributor
    Comments (1905) | Send Message
     
    Hear, hear, Mr Tony. Well-said. Nonetheless, BBY knows the drill and has been shutting stores with weak sales and cutting back on both retail estate and staff, even though it's badly over-staffed, which conversely, makes consumers like me happy, as I get my questions answered whenever I step into BBY. So, it's no wonder that its outlook has improved but can it be sustained? I doubt very much, unless they can beat online vendors at their game.
    24 Jan 2013, 07:58 AM Reply Like
  • TySchuh
    , contributor
    Comments (13) | Send Message
     
    I think it's a valid fact to point out. In addition to market cap we know or should know their comparable margins and it also implies to add in BBY's operational strategy which is very labor intensive which creates obvious hurdles to achieving higher margins and profitability.
    23 Jan 2013, 10:18 AM Reply Like
  • Ted Barac
    , contributor
    Comments (463) | Send Message
     
    Go private or go bankrupt? Actually, going private substantially increases BBY's bankruptcy risks, as they will have the same underlying business with substantially more debt and debt service costs (and the resultant weak balance sheet and financial position). Of course, that would be a problem for the new shareholders.
    23 Jan 2013, 10:26 AM Reply Like
  • benitus
    , contributor
    Comments (1905) | Send Message
     
    Definitely, Ted. Going private will increase bankruptcy risks, especially as their figures can be tweaked without transparency.
    24 Jan 2013, 08:00 AM Reply Like
  • swhmetta@gmail.com
    , contributor
    Comment (1) | Send Message
     
    I was just hired on as a Manager in a store. I start Feb 1st. Should I be concerned? I also had a job working for the State. It's a 1/3 of the salary that Best Buy offers. It might be more secure. Although, they now call State positions "unclassified", meaning your're "at will" like the rest of the world. Thus, you're not protected.
    23 Jan 2013, 12:02 PM Reply Like
  • benitus
    , contributor
    Comments (1905) | Send Message
     
    well, swhetta...you need to produce results better than the chain, to ensure your longevity at BBY and improve your rewards. There's nothing to worry, if you work hard and produce results. Watch out for the slackers, though, as BBY is famous for harboring too much deadweight. Don't be afraid to hire and fire. It will put the rest on their toes and pull up their socks. Too much buddying in the past, so bad habits will die hard, unless you introduce shock therapy. It will ensure your own survival, if you can get more out of your staff, instead of letting them while away their time and collect their pay-checks without pulling their weight. That was how the demise of BBY began, when they hired too much deadweight (too confident of future prospects, when volume increased) and costs outweighed revenue, so profit didn't stand a chance.
    24 Jan 2013, 08:07 AM Reply Like
  • abe11
    , contributor
    Comment (1) | Send Message
     
    in addition to all the jobs bby recently cut, Futureshop(owned by bby in canada) just laid off ~780 employees...good sign? or bad sign?
    23 Jan 2013, 03:59 PM Reply Like
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