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Monday, January 2, 2012
Why Best Buy is Going out of Business...Gradually - Forbes
Consider a few key metrics. Despite the disappearance of competitors including Circuit City, the company is losing market share. Its last earnings announcement disappointed investors. In 2011, the company’s stock has lost 40% of its value. Forward P/E is a mere 6.23 (industry average is 10.20). Its market cap down to less than $9 billion. Its average analyst rating, according to The Street.com, is a B-.
Those are just some of the numbers, and they don’t look good. They bear out a prediction in March from the Wall Street Journal’s Heard on the Street column, which forecast “the worst is yet to come” for Best Buy investors. With the flop of 3D televisions and the expansion of Apple’s own retail locations, there was no killer product on the horizon that would lift it from the doldrums. Though the company accounts for almost a third of all U.S. consumer electronics purchases, analysts noted, the company remains a ripe target for more nimble competitors.
The numbers only scratch the surface. To discover the real reasons behind the company’s decline, just take this simple test. Walk into one of the company’s retail locations or shop online. And try, really try, not to lose your temper.
I admit. I can’t do it. A few days ago, I visited a Best Buy store in Pinole, CA with a friend. He’s a devoted consumer electronics and media shopper, and wanted to buy the 3D blu ray of “How to Train Your Dragon,” which Best Buy sells exclusively. According to the company’s website, it’s backordered but available for pickup at the store we visited. The item wasn’t there, however, and the sales staff had no information.......
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