Best Buy is the leading US speciality retailer of consumer electronics, selling a wide range of audio and video products, home office products such as computers and peripherals, as well as an increasingly broad selection of entertainment software and a limited range of home appliances (the latter under the Home Life banner). Until recently, the group had maintained an aggressive store-opening policy, launching between 75 and 80 new stores every year since 2001. That pace has slowed considerably since the late 2000s as a result of economic slowdown and online competition. In 2008, the company announced plans to move into Europe through a joint venture with UK company Carphone Warehouse. That strategy failed to take off and was finally abandoned in 2013. By that time, growth in the US had slowed dramatically, and another crisis exploded in 2012 with the dismissal of CEO Brian Dunn and resignation of founder chairman Richard Schulze. New management has restored basic stability since then, but the physical electronics retail market remains very challenging. So far at least Best Buy has been able to cope with the changing market better than competitors Circuit City (which collapsed in 2008) and RadioShack (which also effectively closed its doors in 2015).
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|Magnolia Audio Video||Geek Squad|
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Recent stories from Adbrands Weekly Update:
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.
Adbrands Weekly Update 21st Jan 2014: Investors showed signs of increasing concern over the fragile US retail sector following further reports of weak holiday performance. Electronics retailer Best Buy lost more than a third of its market value after reporting worse than expected comps for the nine weeks to Jan 4th. Same-store sales declined 0.8%, better than the year ago period but not good enough to reassure investors of new CEO Hubert Joly's turnaround strategy. Joly had previously said he would sacrifice profitability to match rivals' deep discounting. The latest figures indicate that both sales and profits are still in the dumper. As a result Best Buy's stock lost in just a couple of days all the gains it had made since May last year. A similar fate was suffered by software chain Gamestop, which lost more than 20% of value after reporting a lack of strong new games for the holiday season.
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