Evan Buck

Editor's Choice

  • Three Reasons Why Best Buy Won’t Engineer a Turnaround

    By Evan Buck - December 26, 2012 | Tickers: AMZN, AAPL, BBY, EBAY | Editor's Choice

    If you are in the mood for a shot of nostalgia, just walk in to any Best Buy (NYSE: BBY) location: you’ll feel as if you were walking through an old Circuit City before the doors were closed for the last time.  In fact, my local Circuit City location was replaced with none other than a Best Buy.  The Richfield, Minnesota based corporation has essentially the same business model as the now defunct Circuit City:  selling electronic equipment in large retail stores.  Other companies with that business model are finding it increasingly difficult to compete with Internet retail giants such as Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY).

    Best Buy is an exemplary example of the state of the retail industry as a whole.  Sales have fallen for eight straight quarters, with a 0.8% drop in its fiscal 2011 and a 2.1% drop in 2012.  The company’s stock is collapsing.  As the Christmas shopping season has come to a close, an important question needs to be asked:  is there any “ho-ho-ho” left for the fraught electronics retailer?  The Christmas shopping blitz might provide a miniscule short-term bump.   But, unless Best Buy undergoes a radical revitalization, there is pretty much nothing barring Best Buy’s eventual bankruptcy.