Best Buy Reports Earnings, Announces the Closing of 50 Stores
March 29, 2012 1:26 PM
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Best Buy to cut 400 workers to save money
Best Buy may have dominated its former competitors to the point where
went out of business, but it appears Best Buy itself is now under pressure. The electronics giant recently offered up its financial details and among the profits and losses was a tidbit that the company intends to save $800 million in costs.
Some of the cost savings will come with the closure of 50 retail stores. Out of that $800 million, Best Buy wants to save $250 million during the first fiscal year. Not all the savings will be from the closure of retail locations, Best Buy also plans to use information technology to make its support structure more efficient and eliminate 400 positions in the corporate and support workers.
Best Buy currently has 1,100 big-box retail stores.
While it plans to close 50 big-box retail locations, the electronics giant is also planning to open 100 additional Best Buy Mobile small format standalone stores. Some key big-box retail locations will also be redesigned into the so-called "connected store" formats that focus on selling mobile phones and activating video and broadband services. The retail giant also hopes to increase its domestic online sales by 15%.
The latest financial details are for the quarter that ended on March 3 and Best Buy posted a $1.7 billion loss working out to a loss of $4.89 per share compared with a profit in the same quarter of 2011 of $651 million. Some of the loss in the current quarter is attributed to the $2.6 billion in restructuring costs and other charges Best Buy took.
If we ignore restructuring costs and other one-time fees, Best Buy actually posted a profit better than Wall Street predicted at $2.47 per share. Best Buy is projecting earnings of between $3.50 and $3.80 per share for the new fiscal year with revenue of $50 billion.
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RE: Having worked for this company....
3/29/2012 11:00:28 PM
well over 100%
When did you work there? When I worked at best buy, albeit a short period in time a long time ago (they still had PDAs), accessories were marked up several thousand percent.
Those leather phone cases were being sold at $30-40, when the employee price (still over cost) was $2-3. That's a hell of a mark-up. Cables were similar. Large ticket items (aside from car audio), have always had a low mark-up. I imagine the mark-up on Apple products are also low.
And if you went into a Best Buy near me, and went to "buy a laptop", you'd be waiting half an hour. Sure the employees don't work on commission like Circuit City did, but you're right, they are pressured to sell.
It's the bad employees that don't recognize when they're being a nuisance that upset me.
- Yeah, I don't want your $60 replacement plan for something that cost me $200. That's 1/3 the price and if it breaks, I'd rather buy the next, newer version, than still pay money on top of that $60 just to get the replacement.
- No, I don't want your credit card, recognize that I'm paying with a credit card, I know what one is, and I'd get yours if I cared.
- Why do you need to take my ID and type numbers when I'm paying?
- Can't you tell I could have ordered online and had it delivered by the time I find someone to get my stuff off the shelf and then go through checkout
- Yeah I see you sell soda and candy at checkout.. I also question how long it has been sitting there, since I have never seen anyone else buy it
- Thank you, 3 security guards at the front desk that have to check my bag, even though the register is right next to your booth
- Thank you, 3 security guards at the front desk that have to check my bag when I'm bringing something back to return
RE: Having worked for this company....
3/30/2012 12:04:47 PM
-Some people (like me) actually find those replacement plans worthwhile. Especially the accidental plans. If you break it, you get it fixed, or more likely, get a new one. How about the $130 plan on something that cost $600? I'm not defending the people who don't know when to stop (But they are after all, only doing their job, and if they don't, they will be screamed at for an hour by a manager)
-Same thing as above. Every day stores have a quota for number of credit card applications. They aren't doing it to annoy you, they are doing it because if they don't, they will be screamed at and lecturedl
-If you are paying with credit card, and the signature is not legible, you are supposed to check ID and type the last 4 digits of your card. Sometimes also the driver license # is required for certain items, it's just the way it works. And not just at Best Buy.
-Exaggeration and you know it.
-Not as long as you would think. A few days, max.
-If you even KNEW the amount of shrink that Best buy stores have, you wouldn't mind them chcking your bags.
"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home
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