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  (Source: BMWJNKY/
Best Buy prepares to close many of its big box stores

Last Wednesday, Brian Dunn stepped down from his position as CEO of Best Buy. Initially, most speculated that Dunn was forced out due to the poor performance of the company under his tenure. Later in the day, however, we learned that Dunn only stepped down after an internal investigation found out that he "misused company assets" while having an improper relationship with a female employee.
This latest drama surrounding Best Buy came shortly after the company announced that it was closing 50 stores in an effort to save $800 million dollars. The company has already closed two of the 50 stores, and notified six others that they would be closing.
Yesterday, the company revealed the list of the remaining 42 stores that will be closed. Best Buy expects that most of the stores will permanently shut their doors to customers by May 2.
The company issued the following statement:
This was not an easy decision to make. We chose these stores carefully, and are working to ensure the impact to our employees will be as minimal as possible, while serving all customers in a convenient and satisfying way. But we also recognize the impact this news has on the people who deserve respect for the contributions they have made to our business.
We will be working to help these employees find other positions inside Best Buy. If they don’t find new positions, or if they choose not to work at a different location, a transition including severance packages will be available.
You can view the full list of stores that will close here.

Sources: Best Buy, Wall Street Journal

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Three things they need to do
By dgingerich on 4/15/2012 4:46:49 PM , Rating: 4
There are 3 things they need to do to keep in business:

1. change the store layout to be more friendly. Have you seen the way they lay out the stores now? It's horrible. You have to go through maze after maze to get from one department to another. Wider aisles would be helpful too. Mind you, this is a change done recently, just as the decline started. Coincidence? I don't think so. if a store isn't friendly and easy to get around in, it's going to drive people away.

2. bring back big selection on music and movies. The current selection for music and movies is horrid, not to mention hard to even find. It used to be that the entire center section of the store was music and movies. These days, it's almost impossible to find. I used to like browsing the movies at Best Buy for an hour or so. Now, I can browse for all of 5 minutes and read the titles of all the movies on their 3 or 4 shelves. There's a better selection at Target! This is also a change that happened as the store was declining. Granted, it could be because online stores get such better prices, and services like Netflix kind of forgo the need to own movies, but Target doesn't have such a problem selling movies and music.

3. match prices with online sellers or go with only slightly higher prices with some sort of value offset. Currently, the prices are way above online retailers, and the only "value" above an online store is some pimply faced kid pushing an extended warranty on you. It's just not worth it. There is no extra value in going to the store, only annoyance.

If they do these things, they'll survive. Of course, they need to advertise all these changes, too, to bring people back. If they're stupid, they'll try all sorts of other things. These are retail store business model 101. It's the basics. They've moved away from the basics, and they're failing because of it. They need to go back.

RE: Three things they need to do
By Hakuryu on 4/15/2012 5:14:55 PM , Rating: 5
1. Train their associates to help people, and not train them to upsell and con people. (Will never happen)

2. Staff the actual registers, so I don't have to wait in a line where someone is buying a 60" TV with $20 gift cards (true story; gas perks for buying gift cards at grocery...).

3. Fire every single employee that is standing around while I'm waiting in a line, especially those bullshiting with their friends when they know somebody needs help.

Their music and movies section is one of the reasons they are failing, and not because they don't have a good selection, because they have too much. That is a minor part of their business, and devoting such a large chunk of their stores to it (like they used to), while everyone was buying music on iTunes or Rhapsody was a classic Kodak move.

RE: Three things they need to do
By Brandon Hill on 4/15/2012 5:17:44 PM , Rating: 3
Ditto on the music. I buy all my music through iTunes or Amazon (funny enough, Best Buy regularly runs 20% off discounts on iTunes cards).

I haven't bought a CD in years.

RE: Three things they need to do
By EnzoFX on 4/15/12, Rating: -1
RE: Three things they need to do
By cknobman on 4/16/2012 10:02:50 AM , Rating: 2
I know I am in the minority for sure but I have actually bought 4 CD's in the past 2 months all at Best Buy.

I bought them because:
A: My truck has a CD player with no MP3 jack
B: I stumbled into the $5 section and found some really good music there

RE: Three things they need to do
By StevoLincolnite on 4/16/2012 10:26:30 AM , Rating: 2
I haven't bought a CD in years.

What are these CD's you speak of!?

/end joke.

RE: Three things they need to do
By Brandon Hill on 4/16/2012 10:31:48 AM , Rating: 1
Ahh, physical media. The earliest I can remember back to using are vinyl records (I used to play MJ's "Thriller" over and over again).

I have the feeling that our first kid, due next month, will be going down this same path:

RE: Three things they need to do
By mattclary on 4/16/2012 12:28:53 PM , Rating: 3
I'm sorry, he's out to lunch on several of those items. The mouse isn't going anywhere. No matter the cool factor involved in multi-touch, the mouse requires less physical effort and is more ergonomic. Desktops will be around for quite some time.

RE: Three things they need to do
By ritualm on 4/16/2012 8:48:51 PM , Rating: 2
I still buy CDs besides regular trips to iTunes. Not from BB. Imported.

RE: Three things they need to do
By Warren21 on 4/15/2012 7:44:21 PM , Rating: 3
I have worked at Best Buy in the past as a part-time computer sales employee.

1. We were pushed to upsell things that have big margin (services, accessories) because that's 'where all the money is.' If you're a good salesperson, sometimes your manager/senior will ask you to ignore sections of the department/customers where we can't atttach/upsell these things (Ie. "Ignore those small sales, we need XYZ big sales!"

2. They try to get away with a hybrid model of having almost no dedicated cashiers but training every employee to take debit/credit transactions. This allows them to pull idle sales people from the floor when the cashiers are busy, but not have to spend labour on idle cashiers. Good in theory, bad in practice when no sales people come up to the front to help out.

3. This is simply bad work ethic/management. We used to call them "blueberry patches"; it was something the store management was lackadaisically trying to curb. Part of it has to do with it being a non-commission environment; there is no desire to work harder for every potential sale beyond recognition and job security. When you're talking about a close to minimum wage part-time job, that isn't really a worry. Especially in my time there, I was one of the only people who would rarely engage in these circle-jerks of blue shirts. It would lead to me being the only associate helping 3 customers at once half the time.

Also in my time there, my department (and the store) would frequently miss revenue targets, yet get good numbers for attachment. If this is indicative of any other locations, I can understand the trouble they're in.

RE: Three things they need to do
By dgingerich on 4/15/2012 9:26:29 PM , Rating: 3
I worked retail for 7 years before I got into computer support. I worked two years for Best Buy. back when Best Buy was at the top of their game. Customer service, not sales, was the name of the game. We were not pushed to sell people anything, we were there to provide information, keep the store clean, and help customers with physical labor. This is the way most retail stores work, all the successful ones. Best Buy moved away from that, and now they're failing. What you describe is exactly that kind of change. It's not a really big reach to figure out why they're going down now.

RE: Three things they need to do
By FITCamaro on 4/16/2012 8:53:07 AM , Rating: 3
I dunno when you worked there but when I did, it was all about the upsell. They didn't give a crap that you actually helped a customer get what they need and want. They cared about whether or not you were selling the $150-200 service plan on the $400 Emachine POS(back before they had price adjusted service plans). Whether or not you attached a UPS to the sale.

I left because I got tired of the managers there treating me like I was going to be like them. A 40 year old working at Best Buy.

RE: Three things they need to do
By cknobman on 4/16/2012 10:11:35 AM , Rating: 3
Same for me and I worked there 2004-2005 while I was getting my CIS degree.

Everything was about upsell and attachments and salesmen would literally get reemed and have their jobs threatened if we let someone walk out just buying a base product with no accessories, warranties, or services.

I worked in the computer/printer department and constantly was in trouble for not attaching $30+ USB cables with computers and printers. To keep out of trouble I found a $10 "Geek Squad" cable and attached it to my printer sales. My manager would get furious and come ask me why I would not sell the "better" cables. I would explain they were not really better (not going into specifics but he lost the argument every time). My manager go so mad at me for selling the "lower margin" cable he actually removed it from the computer department (seriously I am not making this up) in an attempt to force me to sell the more expensive cables. Of course I found where the cable was moved to (home theater) and just walked customers over to that area and showed them the cable.

Best Buy has shady business practices and preys on the uneducated shopper, that is their problem, and until they stop doing it and loose that reputation they will continue to dwindle market share away.

RE: Three things they need to do
By dgingerich on 4/16/2012 10:56:57 AM , Rating: 3
I worked for them back in 1993-1994, back when it was more like working at Target. Mind you, Target is still in business, doing well, and still growing. They stuck with the customer service mentality. Best Buy went to the upsell and service plan mentality, and thus that company is dying. Bad management.

By Reclaimer77 on 4/16/2012 2:33:08 PM , Rating: 2
I'm sure if we did a massive survey, we would find that most people don't look back on a former employer fondly regardless. Your observations about Best Buy seem consistent with almost every other retail business. Especially #1. EVERY business looks to up-sell on big margin products. When I did food service I learned real quick why managers always have the waitstaff push appetizers. You wouldn't believe the margin on those things!

3. Part of it has to do with it being a non-commission environment; there is no desire to work harder for every potential sale beyond recognition and job security.

This seems a bit flawed. That model just wouldn't work in Best Buy because most transactions are made without any sales help at all. People walk in, grab what they want, and walk out. If you need one sales person on commission dedicated to every potential sale, your staff requirements would be massive. Which would REALLY hurt profits.

2. They try to get away with a hybrid model of having almost no dedicated cashiers but training every employee to take debit/credit transactions. This allows them to pull idle sales people from the floor when the cashiers are busy, but not have to spend labour on idle cashiers. Good in theory, bad in practice when no sales people come up to the front to help out.

I tend to agree here. But in the context of Best Buy, which largely employs a younger less-reliable class of employee as do most retail chains, this model makes sense. That way when someone gets "sick", you aren't screwed because they were the dedicated trained cashier or whatever that day. You can rotate whoever in their place. There are pros and cons to both methods.

I'm not sure how these issues could possibly explain Best Buy losing half it's value in two years.

RE: Three things they need to do
By DiscoWade on 4/15/2012 7:47:10 PM , Rating: 2
My local Best Buy is one that is closing. A 20 minute drive south, a Best Buy is not closing. The Best Buy closest to me, the one that is closing, was a pretty busy one and I always had to wait in line to check out. The one 20 minutes south usually has more people working there than shopping there even in the evening. Figure that one out.

My local Best Buy was actually a very good one. You would be asked once or sometimes not all about extended warrantes. I bought a laptop there last year. The only ones they had left were "pre-optimized" and I made it clear I was going to pay the advertised price. The manager reduced the price without question. I really and honestly think my local Best Buy is shutting down because they didn't sell enough high-profit extras, and the reason they didn't sell these scams is because the manager treated customers like customers. And because the store treated its customers well, I didn't mind paying a little more for some items.

The management of Best Buy think they need to sell more high-profit stuff regardless. They still don't realize the reason why, Newegg, and others are beating them is good customer service, not prices. Stores cannot compete with online prices because of overhead. What they can do is treat customers right so that people want to come back. I rather pay a little more for good customer service.

RE: Three things they need to do
By Oakley516 on 4/15/2012 10:56:05 PM , Rating: 2
It's not always the obvious issues that may cause a chain to close one store but not another. There may be issues involving the overhead costs of a location that make it more expensive. Or maybe leasing issues or the value of real estate.

RE: Three things they need to do
By Brandon Hill on 4/15/2012 11:10:44 PM , Rating: 2
In the case of the Rocky Mount, NC store closing, the town is a s**thole. Rising crime, stores are leaving at a rapid pace, and it's the crossroads of drug traffic along I-95.

Home Depot, Sears, and Old Navy recently got the hell out of that town. You know it's bad when you can't even sustain an Old Navy.

RE: Three things they need to do
By DiscoWade on 4/16/2012 7:45:04 AM , Rating: 2
Sears closing is because Sears has pure incompetent management thanks to K-Mart buying them.

Old Navy is closing because you can't buy clothes there that last 2 months. I once bought a T-shirt there that didn't last the summer. Never went back. Besides, why would I pay you money to advertise for you?

Home Depot isn't doing so well either. Have you been to a Home Depot in Raleigh? Even those stores aren't doing well. Of course, every time I went the prices were higher than Lowe's. Of course Home Depot is a Georgia store and Lowe's is a North Carolina one, so that has something to do with it.

Except for Old Navy, the problem is not the town but the management of the company. Granted, Rocky Mount has been in trouble since Hardee's was bought, and Centura bank was bought by RBC and then RBC sold to PNC taking even more money out. The money left in this town is tied up in the hands of a few, there are some very rich people in Rocky Mount. But you point is valid, it is a dying town being run into the ground by some incompetent city leader who only get re-elected because they pander to their voting base.

Be that as it may, I still stand by my argument: The store is closing because they didn't sell enough extended warranties. Just read old articles at and sell what Best Buy's focus really is. It isn't good customer service. The Rocky Mount Best Buy was one of the few good ones because everyone there treated me like a customer and not a mark.

By christojojo on 4/16/2012 3:58:57 PM , Rating: 2
Office Depot is struggling too for the same cross trained worse service mentality that is going around.

P.S. Stores dont lie to me. Don't make up information because you don't know just tell me you don't know better yet find a co-worker who does and get the right answer.

RE: Three things they need to do
By nafhan on 4/16/2012 9:36:02 AM , Rating: 2
I think 2 is a no-go, especially if they want to compete on price with online stores. Most online stores don't have any sort of physical presence, and they need to take advantage of that. Also, a physical store, even the size of Best Buy, will still be forced to have a limited media selection.

Basically, they need to stop competing with Circuit City and start competing with Amazon. Let people try stuff out in the store and have it sent straight to their house. Turn BB into a tech showroom that people want to visit, and I think the money will follow.

RE: Three things they need to do
By LSUJester on 4/16/2012 12:32:10 PM , Rating: 2
Only if the prices are good. Why would I buy it to be shipped from there when I can buy it to be shipped from Amazon for much less?

RE: Three things they need to do
By dgingerich on 4/16/2012 4:39:55 PM , Rating: 2
Target does just fine with their movies and music. Granted, it's not a major part of their business, and it shouldn't by for Best Buy, but there are still some people, like me, who do periodically like to walk through a music department and see what's new. Browsing is just not the same online. You can't hardly get the "hmmm... this is interesting," factor online.

As for matching price with Amazon, that would be preferred, but there are certain things that limit that, like staff, building, and power costs. I don't think a physical store will ever be able to completely match prices with an online seller. It has to offer some sort of value add to make up for the price difference.

worst buy
By IlllI on 4/16/2012 3:44:48 AM , Rating: 2
I have not bought a single thing from there ever since the ceo called customers demons

RE: worst buy
By Rob94hawk on 4/16/2012 10:33:55 AM , Rating: 2
GTFO!! When did the CEO call customers demons?! I'll have to look this one up.

RE: worst buy
By Brandon Hill on 4/16/2012 10:40:56 AM , Rating: 2

Synopsis from Blue Hornet if the paywall is blocking full access to the WSJ article:

Back in 2005, an article in The Wall Street Journal outlined an initiative of Best Buy’s then-CEO, Brad Anderson, to categorize and separate customers into two groups: angels and devils. “Angels” are Best Buy customers who, “boost profits at the consumer-electronics giant by snapping up HDTVs, portable electronics, and newly released DVDs without waiting for markdowns or rebates.” These are the type of customers who, if they are part of your email subscriber list, could be identified as highly profitable when you conduct an RFM query in BlueHornet.

But listen to Best Buy’s definition of a “devil” customer: “They buy products, apply for rebates, return the purchases, then buy them back at returned-goods discounts. They load up on ‘loss leaders,’ severely discounted merchandise designed to boost store traffic, then flip the goods at a profit on eBay. They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge.” Hmm….Depending on the parameters of your RFM query, these devils could be identified as profitable customers, right along with your angels.

RE: worst buy
By Solandri on 4/16/2012 2:54:25 PM , Rating: 2
I thought I made a post along those lines late last night, but I guess I forgot to hit submit after previewing. To sum it up, I think Best Buy's management made the mistake of thinking these "Angels" were good and "Devils" were bad, and worked on eliminating the Devils while encouraging the Angels. That's why you see things like odd store layouts designed to force you to walk by lots of sections you're not interested in - to encourage Angels to make an impulse buy.

The problem is, as the last sentence you quote says, if the Devil is still a profitable customer, you still want them coming to the store. The store layout may increase profits from Angels. But if it annoys Devils enough so they stop shopping at Best Buy, the decreased profit from losing the Devils could outweigh the increased profit from the Angels.

RE: worst buy
By christojojo on 4/16/2012 3:56:42 PM , Rating: 2
The ;ay out is annoying. When I enter the store I feel like I just walked into my kids messy room. It doesn't feel comfortable and the assault is terrible on the senses.

I was just in there t buy a replacement Nostromo after mine wore out (5 years not bad. I was assaulted by Car radio sales, a PC sales that told my girlfriend she was stupid for being an Apple Fan (not fanatic) (I own a few Windows OS PCs).

I was assaulted by the cashier that insisted to tell me my Nostromo would break before the year was over and I would regret not buying the replacement warranty. I told him to stop so he tried to force feed me several other services and items, then tried to get back on the warranty again. If I didn't want that Nostromo right away I would have told him how to restock it.

A few other little notes of irritation.
Sata 18 inch cable best buy at store $19.99
2 of the same cables at including shipping $5.00 a few weeks back.

Nostromo also had a $10 premium for the satisfaction of buying it at Bestbuy. MY biggest regret was dealing with the sales people.

Bad harbinger?
By RaistlinZ on 4/15/2012 4:29:17 PM , Rating: 2
One of the stores closing is one I used to work at when I was in computer sales, heh. I hope BB is quicker to adapt their business model than Circuit City was.

RE: Bad harbinger?
By joex444 on 4/15/2012 6:26:25 PM , Rating: 2
They eliminated Circuit City which should have given them a monopoly on these kinds of stores, and yet here we are...

It's not all because of the Internet and online sales. Those sales are very easy to make for music and movies, particularly streamed or in the form of iTunes, etc. It's hard for BestBuy to try and compete with the drive to store - hope they have what you want in stock - try to pay for it model that they currently have when iTunes offers "don't move, it's playing in 30 seconds." Same deal with iTunes videos, and Amazon, also NetFlix (though they stream crap movies and some decent TV series).

They should do fairly well with the "I don't trust buying expensive things online" crowd, who are looking for PCs, laptops, TVs and surround systems. For them, being able to go to the store and see it is important but also knowing there is a place you can go that will help you with an issue later on. Joke all you want, sending back an HDTV to some online retailer is a pain in your ass you don't want; get a defective one from BB and they swap it out for you, not much to worry about.

What I've found people do is go to BB to look at and touch the things they want that are expensive, but then buy it online from Amazon or Newegg because it's cheaper. BestBuy already got those people in the store, but is having trouble making the sale. Dominating factor there is price, and as a physical retailer they just can't compete with pure online stores. It's simple, they can't win.

Where will people go once BestBuy is gone? Target, Wal-Mart, and Sears all have these things on display and may be able to offer a better price. I wouldn't worry about consumers in a post-BestBuy world.

RE: Bad harbinger?
By ShaolinSoccer on 4/16/2012 2:02:26 AM , Rating: 2
I find it ironic that recently, I bought a camera from Best Buy and it was cheaper there than anywhere else. But usually, I don't mind paying a bit extra for something at a store nearby just in case I need to return it. It sucks having to order something online, it be defective then having to wait on shipping it back and forth. Not to mention having to pay for shipping and handling.

They could save themselves
By Mathos on 4/15/2012 9:23:02 PM , Rating: 2
Most of these companies could save themselves. But, 90% of them, either the management doesn't listen to the ideas of the few good employees they have. Or they simply don't listen to what their customers are telling them.

I know too many people are stuck on the iTunes, and Hulu, Netflix thing. Those are all good and nice... But, what exactly do you do if your internet is down, or if perhaps something happens to iTunes and or your listening device?

I personally prefer to own a physical copy of my movies and music. That way I can control the rip quality, or the playback quality. And, not get stuck with streamed playback quality, or what half quality the RIAA decided itunes could sell. Then if my internet is down, or I'm in an area where you can't get broadband or any good cell service, hey wait, I can still access my stuff.

Companies like Best buy, Wal-Mart, etc will drive themselves slowly into the ground 1 by 1. Because they've forgot about the basics of retail, and they want to try and maximize profit with as few sales people as possible, thus impacting service that much more.

RE: They could save themselves
By Brandon Hill on 4/15/2012 9:45:07 PM , Rating: 2
I know too many people are stuck on the iTunes, and Hulu, Netflix thing. Those are all good and nice... But, what exactly do you do if your internet is down, or if perhaps something happens to iTunes and or your listening device?

I personally prefer to own a physical copy of my movies and music. That way I can control the rip quality, or the playback quality. And, not get stuck with streamed playback quality, or what half quality the RIAA decided itunes could sell. Then if my internet is down, or I'm in an area where you can't get broadband or any good cell service, hey wait, I can still access my stuff.

At home, our Internet has been down for a total of 3 hours in the past year (Time Warner Cable), so it's not that big a deal for movies; at least for us.

Like you, I prefer Blu-ray for my movie playback, but I don't balk at "free" streaming access from my Amazon Prime account.

I download my music, which is saved onto my computer and my smartphone. No streaming involved. As for sound quality, anyone expecting to get symphony quality audio from a smartphone, laptop, or iPod is barking up the wrong tree.

By Arsynic on 4/16/2012 10:33:55 AM , Rating: 3
At first this may seem counter-productive to what they're trying to do, but it's not. Best Buy has stores and probably warehouses. They need to consolidate stores and warehouses into Costco-like facilities where there are fewer sales associates and the front of the store is an area where they can try before they buy. The rear of the store is the warehouse where they ship online orders from. There would be no need to send delivery trucks to hundreds of stores, because everything is there. You can order online and pick it up from the Best Buy Warehouse. They can also include a membership service ($60 a year or so) where members get the absolute "best buy" on a product--online-level prices, free use of electric charging stations, exclusive access to Black Friday deals, etc.

I would also expand Geek Squad to offer IT Services mainly for SMBs. Times are changing and they need to respond to that change with drastic measures.

This would mean that Best Buy would have to phase out all of their stores and warehouses and build several new facilities that are slightly smaller than a warehouse and much larger than their stores.

It's just a matter of time...
By Beenthere on 4/15/2012 6:10:52 PM , Rating: 2
...before they go under or get bought out, which is good except for the loss of jobs.

Compared to Frys....
By DBissett on 4/15/2012 7:19:50 PM , Rating: 2
I'd much rather shop/buy at Fry's even tho those stores are a much farther drive for 2 reasons...selection and price. Fry's has more of everything and sells cheaper than BB, with more knowledgeable and less pushy sales staff. Have bought computer parts, TV's, small appliances, etc. Great sales, no hassle returns, couldn't be better. BB lost it when they adopted their current store size/design and became a semi-mass tech merchandizer. Enough to drive CC out of business but nothing more. Time they failed or came up with something better for customers.


Best Buy needs to die.
By Rob94hawk on 4/15/2012 9:05:56 PM , Rating: 2
Best buy reminds me of slimy used car salesmen. I have a BB 5 miles down the road. They won't be missed if it closes down.

By dark matter on 4/16/2012 5:55:57 AM , Rating: 2
And then you never go back. Ever. Purely out of principle, but really because you just can't be bothered with the crappy stunts.

I've seen so called "sales" where the items on sale are "out of stock", but the very next day the sale ends, the items are miraculously there at full price. But don't forget the staff are directing you to "other products" that happen to be "in stock" if you ask about stock.

If a shop deliberately lies to me like that, I have no trust in them. Once that trust has gone, your brand is damaged, and it costs a company far more than the marginal profit made from bait and switch tactics.

What surprises me, is how well CEO's are paid, yet fail to understand the basics of brand value. And the "perception" of that brand.

By Flunk on 4/16/2012 9:28:53 AM , Rating: 2
I live in Canada so this may not apply but I find that I never buy anything at Best Buy anymore because of the prices.

Best Buy's prices used to be a little higher than online or discount computer suppliers but now it's just ridiculous. They sell peripherals for double they price of their competitors and everything else has a steep markup.

I sometimes go in Best Buy now but I never buy anything because I always price compare everything and I'm not paying a 40% premium (or in a case of some things like HDMI cables a 1000% premium).

Ft Myers Florida
By Cheesew1z69 on 4/15/2012 4:53:17 PM , Rating: 1
Is closing, such a shock! Not! There are 4 stores within a 20 mile range. One closing isn't going to be a big deal.

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