What if Best Buy goes out of business? (Grant, Montgomery: to buy, movies)

[tisaroo]

Everyone thought that when the buggy-whip industry went away. People will drift off to other endeavors: the bigger issue is how we ship all our money and manufacturing jobs over-seas. A lot of the IT at Best Buy seem to be green-card people so they will just go back to their original homes. Other people will be absorbed into whatever buys Best Buy.

[Radical_Car]

Originally Posted by knke0204

Add up all those "great wonderful big retailers" revenues and they won't equate to Best Buy's.

Who said that? "great wonderful big retailers" ?
I just listed a bunch of stores off the top of my head that fully went out of business, and I am well aware that there revenues won't equate to Best Buy.

I think Best Buy could go out of business, some day. Although they can also improve and change so that they will become profitable again. Hopefully it isn't the former, because yeah they are a huge company and that would be a lot of lost jobs.

I remember when people said Circuit City would never go out of business, etc. And it's true that Best Buy is now a lot larger than Circuit City(and yes knke0204 I am aware there revenues wouldn't equate to Best buy and all that stuff, etc) but for years Circuit City was the leader and Best Buy didn't surprass Circuit City in sales until 1996(heres one source stating that Best Buy Vs. Circuit City - Forbes.com), and Circuit City was a much older company than Best Buy is.

Circuit City made a lot of stupid moves, like when they officially stopped selling appliances in the late 90s/early 2000s and that "DIVX" fiasco(Circuit City's DIVX Format Bites The Dust) when DVDs were fairly new. Let's hope Best Buy doesn't make any costly mistakes like those.

[southernsmoke]

Originally Posted by knke0204

Revenue doesn't equal profit... Hmm, of course, welcome to day one of Freshman year Accounting.

Yeah, I am well aware that revenue and profit are basic concepts, but apparently some people are not... Must be that Minnesota education that golfgal raves about! (joking)

Originally Posted by knke0204

Add up all those "great wonderful big retailers" revenues and they won't equate to Best Buy's. Whether you like it or not, revenue is part of the balance sheet that drives business.

You just explained how elementary the distinction between revenue and profit is. (Revenue is not actually part of the balance sheet, by the way.) So you should know that profitability is what is going to keep a business "in business," not merely revenue. So I fail to understand why you talk up Best Buy's revenue so much ("it's SOOO MUCH MORE than those other companies' that went under!!!") as proof that Best Buy is unlikely to go out of business. I don't care what Best Buy's revenue is if they are bleeding $1.2 billion annually. I will not be impressed by a mature company's revenue if it can't turn the revenue into profit.

[Cruz Azul Guy]

Originally Posted by southernsmoke

I don't care what Best Buy's revenue is if they are bleeding $1.2 billion annually. I will not be impressed by a mature company's revenue if it can't turn the revenue into profit.

and I would imagine that Best Buy's shareholders are not impressed either.

[moving123456]

Originally Posted by moving123456

They are starting to lose 1 top executive per month...

The Chief Technology Officer/Geek Squad founder resigned in March.

The Chief Executive Officer resigned in April.

The Chief Marketing Officer resigned a few days ago.

Originally Posted by moving123456

Now the founder of the company and Chairman of the Board of Directors Richard Schulze is stepping down.

Another one jumps ship... Ryan Robinson, the senior vice president and domestic Chief Financial Officer is leaving.

[Cruz Azul Guy]

Best Buy is too big a profitable to ever fail, am I right or am I right?

Best Buy profit skids 90% | StarTribune.com



Best Buy = toast.

[moving123456]

Best Buy started downsizing the Minnetonka store recently. I would guess that they are tearing down a little more than 1/3 of the store.

[nrogers1122]

Best buy is not in good shape, but it doesn't really matter. Worst case, the company gets sold or merged into another giant. There are too many assets here to pull everyone out immediately. Even if there is a complete relocation (which would be stupid), that would likely be something that is phased in over the course of 9 months or a year. Many employees would likely be offered relocation packages. The remainder would likely have quite a bit of time to look for a job if they aren't already started doing so. Admittedly, I haven't looked at the public filings for Best Buy or done an analysis on their reports. I'm just speculating with the presumption that the "talking heads" are accurate.

[nrogers1122]

Originally Posted by Radical_Car

Ummmmm... Just to name a few...
Hollywood Video
Circuit City
Linens N Things
KB Toys
Borders
Montgomery Ward
Woolworths
Ames

Ames Department Store Final Voicemail video - YouTube

Interesting case study here.

The video industry pretty much went kaput due to netflix and the cheapening of DVD/BluRay (thank you Best Buy). This rules out Hollywood and Blockbuster for that matter. (Remember the 90s when there was a movie rental place on every corner?)

The toy store industry was pretty much decimated by Toys R Us megastores and Target/Wal-Mart, so that explains KB.

Borders lost out to Barnes and Noble, which was an industry leader in customer experience and technology, so that explains that.

Monkey Ward is basically Sears, which is basically K Mart. All of these businesses are being driven out by the Wal-Marts and Targets. There is no longer a need for a store that sells clothing, riding lawn mowers, and appliances to the degree of these dinosaurs.

I'm perhaps too young to remember Woolworths or Ames - or perhaps from the wrong area?

The commonality here is that these changes are due in large part to a changing marketplace and a shrinking economy. Best Buy is impacted by neither of these. I would be interested to see an in-depth academic case study of Best Buy (or maybe doing one myself if I can find the time). Honestly, I think that the reason that Best Buy is doing poorly is primarily poor management and poor business decisions. I believe that there is still a market out there for big-box electronics stores. No other storefront sells movies/music on this massive scale anymore; BB is pretty much the lone survivor in that category. If BB can increase its online experience, and find new ways to streamline its store models (which it is doing by shrinking them), it can and will survive.

[Radical_Car]

Originally Posted by nrogers1122

I'm perhaps too young to remember Woolworths or Ames - or perhaps from the wrong area?

Most likely wrong area, Ames was a chain of stores in the northeastern part of the United States that started in the late 50s and went out of business in 2002. They had somewhere around 400-500 stores in like 19 states if I remember correctly. It basically is just like Walmart or Target, and like you said, Targets and Walmarts are driving out other smaller chains. There actually is a fan club site still up and still pretty active considering it was a small-ish chain that went out of business 10 years ago. The Ames Fan Club Lots of info and pictures there,people reminiscing, it's actually kind of surprising they seem to that big of a dedicated fan base... I can't imagine if Kmart were to 100% go out of business that 10 years later there'd be former employees talking about it and claiming they miss working there and people saying this miss shopping there... lol

If you do some googling they still have vacant buildings sitting empty with the signs still on and everything. Their headquarter building at 2418 Main St Rocky Hill, CT 06067 is still vacant and is for sale.2418 Main St, Rocky Hill, Connecticut 06067 (MLS# G622416) - Coldwell Banker Residential Brokerage - ColdwellBankerMoves.com

And if you try calling their phone number which you can find here History of Ames Department Stores, Inc. – FundingUniverse, it's still active, you get a machine recording saying that Ames Department Stores are out of business and it gives you an email for someone to contact regarding severance pay(I wonder if the email is still active..?) lol. I have WAY to much time on my hands, I have no clue how I know all this, because I've never been to an Ames nor have I been to the Northeastern part of the United States.... lol it's amazing what you find out on the internet when you're bored...

If you're really bored you can read this and discover tons of useless information http://bankrupt.com/ames.txt

Anyways, back on topic, It's not looking too good for Best Buy...