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Is Best Buy In Trouble?


  • I am not an analyst.

  • I have no inside info (although I was at Best Buy HQ’s yesterday)

  • Best Buy is a frequent host of the Minnesota Recruiters group

Minnesota based Best Buy has been in the news the past two weeks and it is has not been pretty.

It started with the pre 2011 Christmas debacle of customers who placed orders online as early as Black Friday were notified that their gifts would not be shipped in time for the holiday.

Worse, they were not told until days before.

Today is the report of December 2011 same store sales being down. There was some good news in the report too but many headlines I have seen are focusing on the negative.

Earlier this week (and what has spread online very fast) is this article from Forbes Why Best Buy is Going out of Business...Gradually

Larry Downes starts the article with this:

“Electronics retailer Best Buy is headed for the exits.  I can’t say when exactly, but my guess is that it’s only a matter of time, maybe a few more years.”


He takes the company to task on a number of topics from customer service to business model to online vs brick and mortar to their handling of the Christmas shipping issue.

As I post this there are more than 800 comments on the story with thousands of Tweets and Facebook “shares” pointing to it.

Today Best Buy CEO Brian Dunn has a post on his blog My Thoughts on Best Buy’s Recent Media Coverage where he responds to the holiday issue and the Forbes article.

I have many, many friends who work in the Best Buy corporate offices and I know them to be very smart and motivated folks.

I don’t know if Best Buy is in trouble but I do know they have a talented group and if senior management gives them the tools and freedom to do what is needed they can make this one of those “do you remember when” moments and things will be good.

If not…this will be a different kind of one of those “do you remember when” moments.

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Paul - I've been reading some of the same articles. This is scary for many reasons. As a resident of Richfield I must say losing an employer of this size would be a huge hit to the community in many ways. Of course, other corporations could always come in and take over, but Best Buy has been pretty good to the city.

I am confident they will turn it around. Maybe they just need a kick in the pants.


I would rather poke myself in the eye with a sharp object than enter a Best Buy retail shop. But good things have been said about them as an employer on the corporate front. For the sake of those employed with BBY, I hope the company can turn things around.


Great points, Paul. I think that the Forbes article author has a chip on his shoulder, although he's absolutely right that Best Buy has continually stumbled over the years. I've never experienced poor service in any of their stores; quite the contrary.

CEO Brian Dunn needs a reality check, however. He says that 80% of electronics purchases are made in-store rather than online. If that is the case, how could BBY not be increasing same store sales, given that their two biggest specialty competitors, Circuit City and Ultimate Electronics, have gone away such that Best Buy is the last man standing? On top of which, most households have bought a laptop and a HDTV in the past 12 months so the purchase cycle is up.

Yes, I know that Target and WalMart have increased their Electronics departments and offerings, but in my experience Target staff can barely tell you what a DVD is for, let alone why one TV is better than another. Best Buy's problems are all of their own doing. The corporate offices are crawling with consultants, which results in frequent re-organization and re-trenching. How can they not be succeeding in China, where personal income growth and spending are both increasing at a staggering rate?

I'm not convinced that Best Buy is working their way slowly out of business, but their Board needs some new life so they'll bring in executive leadership with a new vision.


Best Buy is a dinosaur AND they treat customers like shit. You can't survive in this market as a dinosaur and treat your customers like a bowel movement. The extinction of Best Buy is certain, how long it takes is another question.

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