Best Buy is the leading US speciality retailer of consumer electronics, selling a wide range of audio and video products and home office devices such as computers and peripherals, as well as an increasingly broad selection of entertainment software and a limited range of home appliances. Geek Squad is the store's highly regarded technical support service; Pacific Sales is a small standalone chain specialising in kitchen and bathroom installations. Until recently, the group had maintained an aggressive store-opening policy, launching between 75 and 80 new stores every year in the early 2000s. It also moved into Canada with the acquisition of local retailer Future Shop (gradually rebranded as Best Buy); into China with control of local chain 5 Star; and then Europe through a joint venture with UK company Carphone Warehouse. The pace of expansion slowed considerably at the end of the decade as a result of the general economic slowdown and fierce competition in the US from Amazon and other online sellers, but the collapse of main rival Circuit City in 2008 and steady decline of RadioShack helped Best Buy's revenues to top $50bn for the first time in fiscal 2011. However, the group was left reeling the following year by the sudden dismissal of CEO Brian Dunn over allegations of personal misconduct, and subsequent resignation of founder chairman Richard Schulze. New CEO Hubert Joly restored stability with a wide-ranging restructuring and cost-cutting program. The plug was pulled on Europe in 2013, and on China two years later, but Best Buy still operates in Canada and also in Mexico. Performance in the US has improved but the physical electronics retail market remains challenging. The group has responded by diversifying into healthcare technology with a series of acquisitions: home monitoring services GreatCall and CST and BioSensics which makes monitoring devices used in clinical trials. By early 2020, the group operated 1,010 mostly large-format warehouse-style stores in the US - a collection of smaller Best Buy Mobile specialist outlets were shuttered during the year - and another 165 or so in Canada and Mexico. Corie Barry succeeded Hubert Joly as CEO in 2019; Joly remains executive chairman. Revenues for the year to Feb 2020 were $43.6bn, with net earnings of $1.5bn.
Capsule checked 28th September 2020
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Who are the competitors of Best Buy? Until its collapse at the end of 2008, Best Buy's main rival was Circuit City. Another long-established competitor, RadioShack, collapsed in 2015, though the brand still trades through a small number of outlets and online. Other specialists in the consumer electronics sector include Ultimate Electronics in the US, and Rogers in Canada. All these speciality retailers face increasing competition from mass-merchandisers Walmart and Target, both of whom have moved aggressively into consumer electronics, as well as online stores such as Amazon. See Retail Sector index for other companies
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Recent stories from Adbrands Update:
Adbrands Daily Update 16th Apr 2019: Best Buy CEO Hubert Joly announced his resignation this week after completing a successful turnaround he began seven years ago. He will remain executive chairman for the time being, but passes over the CEO role to Corie Barry, currently CFO. Barry becomes one of the youngest CEOs of any S&P 500 company as well as one of the very few women. The 44-year-old is only the 24th woman in that list. The other 476 are all men. Current Best Buy COO Mike Mohan was promoted to president.
Adbrands Weekly Update 16th Aug 2018: Electronics retailer Best Buy is to spend $800m to acquire Jitterbug mobile phones, simplified devices aimed at the senior market. A key feature in the devices is an emergency call button, and parent company GreatCall - also being acquired - offers other such services linking customers to medical advice and assistance. Revenues are around $300m a year and GreatCall claims to have 900,000 subscribers in the US. The new purchase will complement Best Buy's Assured Living, introduced last year, which helps users check in remotely to monitor the health and safety of their parents.
Adbrands Weekly Update 27th Aug 2015: Though most large marketers saw millions in value written off their market capitalisation by this week's global stock market rout, there were some exceptions. Few were quite as unexpected as long-ailing consumer electronics retailer Best Buy, whose share price soared by 17% after it reported a long-awaited turnaround in performance. US same-store sale rose by almost 3% in 2Q, and total revenues were up almost 1% instead of the 2% decline analysts had been predicting. Underlying earnings per share were more than 40% above expectations. The company also said it expected consumer spending to remain steady in the current quarter.
Adbrands Weekly Update 5th Dec 2014: Best Buy sold its 184 remaining electronics stores in China, trading under the Five Star brand, to a local real estate group for an undisclosed sum. That brings to an end the retailer's disastrous foray into international markets beyond North America. It follows the sale last year of its investment in Europe's Carphone Warehouse. The group said there would be no changes to its operations in Canada and Mexico.
Adbrands Weekly Update 6th Mar 2014: Best Buy reported slightly better than expected results for the year, raising hopes that the slump it has endured since 2011 may finally be coming to an end. However, holiday sales were still very weak, with same-store comps down by another 1%, although the group managed a solid profit. Full-year revenues slipped 3% to $42.4bn, but net earnings of $532m were above expectations, and considerably better than the previous year's $249m loss.
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