Best Buy posts $1.7b loss, to close 50 U.S. stores, cuts 400 corporate-level jobs

“Best Buy planned dramatic action Thursday after it posted a $1.7 billion loss for the last quarter of its fiscal year,” Electronista reports. “While better than expected, it led the company to a plan to save $800 million by its fiscal 2015 that would see it close 50 of its ‘big-box’ stores during its fiscal 2013, which started with the beginning of March. The retail chain hadn’t named the stores in question, but expected these and other cost savings to cut $250 million in 2013 and $300 million just for retail by the 2015 target.”

MacDailyNews Note: The company said it plans to open the same number of stores in China during the same time period.

Electronista reports, “Some of the other savings would come from cutting 400 corporate-level jobs, infrastructure savings, keeping non-product purchasing to a minimum, bringing former consulting work in-house. It hoped to reduce the costs coming from switching to new products and reduce the costs of both supply and handling returns. The results would be partly helped by closing UK big-box stores after a brief attempt at exporting the primarily North American shop format abroad. Best Buy would still run in Europe, but in 2,400 small locations.”

Read more in the full article here.

Read more in Best Buy’s press release here.

MacDailyNews Take: Looks like forcing customers to buy service plans in order to get iPads out of storage and making customers stand around over half an hour just to be allowed the chance to buy an iPod nano, then having the so-called “manager” tell the customer “we’re busy,” and then having the customer walk out and buy their nano at Target isn’t working out so well for Best Buy.

39 Comments

    1. While I am no Obama fan, Best Buy’s failure is their own. They are acting like Home Depot, which started out strong with knowledgable staff but then took their business for granted and failed to offer the customer experience. Home Depot is now adjusting somewhat, will Best Buy see that the buying experience there is DREADFUL? Meanwhile people LOVE to shop at Apple stores. They have nailed the experience!!

      1. 2nd this.
        This can’t be blamed on anyone except bestbuy execs.

        I shop at bestbuy from time to time, the place has gone downhill in the past few years. The apple section is the only decent place, and it’s getting less traveled cause people just go to the apple store now that we have one..

        I picked up an apple tv a few months back there, didn’t feel the need to go downtown and I was near them anyway.
        I also needed an hdmi cable with it, I asked them where the ape hdmi cable is. The answer was ” apple doesn’t make one, they reccomend monster cables”.
        I laughed outloud at the guy.
        Walked over to the iMac and pulled up the apple store, showed him the apple hdmi cable and told him he’s an idiot.

        Ended up going to the apple store that might anyway…

        1. He replied to U.S. Electorate, so that would be who he’s calling an idiot. While I don’t like Obama either, I’m sick and tired of people like U.S. Electorate trying to hijack MDN threads to create a political flame-fest. And we haven’t even gotten to the presidential election race yet.

        2. Are you having a hard time today lining up the original comments with replies? 3 comments from the source is not a stretch. Go ahead…try again. This time you may realize your “idiot comment” ought to be self-directed.

  1. While I’m sure there are some Best Buy employees that are actually quite knowledgeable on the products in their department, my personal experience with their staff has been quite the opposite.

    Oh well, I do most of my shopping at Fry’s Electronics anyway.

  2. I love best buy but only because I don’t have a choice. They have the stuff I need in a pinch and the only issue is the people that work their are basically blithering idiots in blue shirts. 99% of the time they gather in little herds and talk about personal stuff as opposed to help a customer. Go ahead and try to go in there and buy what you want.
    1. No one will help you find something that shows they have 50 of online.
    2. Sometimes they just latterly walk away for no reason in the middle of a sale.
    3. They have no clue what they are talking about. They latterly find people that can stand upright and fog a mirror.
    4. Half of them smell bad (Here are your unwashed masses they speak about)
    5. Then once you have gone through the nightmare found what you want with no help they make you wait forever to get out of their.
    6. Lastly because they are so helpfull they want to sell you their support contract. Which might as well be a religious pamphlet as far as Im concerned because they can’t take no for an answer. I have even been told if I don’t sell you this contract Im going to get in trouble and might lose my job. I say well if you were a better sales person in a better store that would not happen.
    7. Finally Geek Squad no amount of black and orange paint will make these guys look like geeks or even experts. They are clueless and try to feed you a line of bullshit when clearly they don’t have a clue what the hell they are talking about.

    But I will miss them anyway just needed to vent about them. Why can’t they have an Apple like experience? I walk in get a dude with a scanner grab a box hand it to him slide, swish email and Im out of their.

    Bought 2 new Apple TV’s, a new iPad 2 case, and legato video capture device and was out of there in under 8 minutes total. Thats how you do it. Why the register why the high pressure to buy stuff I don’t want, why the bait and switch. Apple got it right I can only hope other retailers learn from Apple.

      1. “Latterly” might have fallen out of fashion during recent centuries, but from Dictionary.com:

        lat·ter·ly
        [lat-er-lee]
        – adverb 1. of late; lately 2. in a later or subsequent part of a period

    1. I’m the last to point out spelling, however. This comment just reeks of ignorance and bigotry.

      On the other hand shopping at BB does blow. I doubt that the margins on Apple products is the problem. As another poster nailed it. BB lead the price war on TV’s. Now they get to live in a world of no profits. Something to be said for being the best at what you do giving customers the choice to pay for quality.

  3. Seems like all personal electronics and computers are drifting Apple’s way anyway. Apple TV will probably take a lot of their TV sales away too. Maybe Best Buy can just focus on kitchen appliances & Xboxes solely? When you think about the advancement of tech it has sort of narrowed the playing field with consumer multi-capable devices so where 3-4 boxes were needed before ONE does it now.

  4. Before Apple went full force into “Apple Store” expansion I used to go to the local BestBuy or FutureShop to buy an apple product and I would always get some stupid sales guy trying to change me over to some windows crap. Their attitude was always kind of “what part of ‘we’ve tucked the Apple products in the darkest corner of the store don’t you get?'” Now BestBuy is rueing the day they decided to treat Apple with contempt. Makes me so happy!

  5. Yep, horrible customer service practices finally begin to catch up with them.
    Before Amazon, new egg, tiger direct and other online retailers existed, I guess you could get away with mistreating your source of income.

  6. Don’t forget that Apple, for the most part, only sells Apple products. They don’t need you to purchase accessories or even their service plan, Apple Care. They make money off every transaction that leaves their store. Because Best Buy is primarily a reseller, aside from Rocketfish and Dynex products, they make little to almost no profit off of their main products they carry, especially on Apple items. This is something that Best Buy needs to deal with, where as direct to customer shops such as Apple Stores don’t.

  7. Serves them right for selling HDMI cables for $50. The service and selection at our local store is poor. I only shop there in a pinch and still feel I have been ripped off.

  8. Not surprising. Last year I picked out a TV stand at our local BB. Took 3 trips across town to finally see it arrive after being told it was there the 2nd trip. I’ve nearly two hours into this so far. They then proceed to completely disrespect me because i don’t have a certain ID, yet I have their signed original receipt in hand with every detail showing I bought the damn thing.

    Now keep in mind that I’m a corporate account, have spent literally tens of thousands of dollars in Macs and much more with them, yet their dumb*** manager had the gall to tell me they have a zero exception policy on the ID. I told him, flat out, that I am taking all of my business elsewhere and he had nothing to say to that other than, “Sorry, it’s company policy.” For a stupid TV stand that probably cost them $50, they were fine kissing my big account goodbye! STUPID. I’ve never been back.

    Zero exception policy! Ha. Such policy belongs in NO business that wants to stay in business!

  9. Let’s not forget that Best Buy was one of the prime movers in the big flat screen HDTV price drop and huge sales push (all at discount prices!) a couple of years ago. Between manufacturers and retailers like Best Buy, TV prices were pushed way down just to move units. Now we have TV makers and retailers complaining that they don’t make much off of each unit sold.

    Well, guess what? When you get into a price war and convince consumers that the only thing that matters is the price of your product, then you have no option but to underprice the competition. And that removes profit from your business equation.

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