Piyush

Will Blockbuster Rewire Circuit City - And Itself?

I havent taken a look at CC's books in a while but is this some sort of a Eddie Lampert style Sears/Kmart real estate driven value proposition?
I used to live in Richmond right by the CC HQ and knew several people who worked for them but I never got the sense that they owned much of their Real Estate and I am assuming neither does Blockbuster.
How does this deal make sense? Inbound customer steps into store at CC are dismally low owing to their lack of product selection, knowledgeable staff and dingy stores. Blockbuster is some what similar. I just dont know if this deal makes any sense whatsoever. If you want a video game kiosk in BB, you can invest or lease some and if you want to rent movies at CC, you can more often than not buy them cheaper than you can rent them at CC. Better still use them and return them as non-working!! (that would be shady I must agree)
Any which way to look at this - BB shareholders are going to get burned, CC shareholders could get some good money for a loooooosing bet they made - hopefully they got in at 3 bucks!
I cannot imagine CC has not learnt anything from BestBuy's retailing strategy - they have been able to weed out their worst customers and retain their best via best case segmentation and astute individualized reorgs of their stores.. why cant CC do it and do a better job!!

Cheers,
P