Best Buy A Better Sell (NYSE: BBY) | MartinKronicle - Michael Martin
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Best Buy A Better Sell (NYSE: BBY)

Best Buy is shuttering stores to help the beleaguered retailer shore up expenses.

Normally, layoffs and store closings will save money and are a step towards bringing the firm to higher earning per share (as well as cause a great deal of financial hardship for those laid off). However, I see this as a terrible leading indicator for what lies ahead for not only Best Buy, but other brick and mortar retailers.

One of the stores being closed in SoCal is literally right across the street from the UCLA campus in the Westwood section of Los Angeles. That would make you believe that they’d have 4 academic quarters of regular walk-in business from students who need and want the latest video game consoles, TV’s, cameras, and smart phones (UCLA is on a quarterly system, not trimesters or semesters fyi). And thus, if the foot traffic across the street from UCLA can’t sustain a physical location, the macro bet for me is that Best Buy’s days are numbered in all their physical locations.

The decisions that I make in Los Angeles to go ANYWHERE are always conjugated with 2 things: the time of day and the location. Depending on the time of day, you may actually be going against the traffic than be jammed in it. When this happens, it is manna from heaven from the traffic gods.

You may have heard that Best Buy is a showroom for shoppers to see the items they eventually go purchase on Amazon.com. That might be more of a foreshadowing than Best Buy wants to let on.

“No stock is too high to buy, nor to low to sell short.” Best Buy in this regard is a better sell.

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  • Sad but true. Best Buy recently dipped their toe into the UK market and then pulled out. Their nearest competitor here is Dixons, a bricks and mortar retailer with zero reason to shop there. Last time I had to interrupt a ‘sales assistant’ to ask what the difference was between 2 different Apple Macs they had on sale, he said ‘Obviously the more expensive one is just more powerful so it’s better’. Thanks Einstein. You’ve made my decision for me. Amazon.

  • This with Amazon considering opening physical retail locations. Ahh the ebb and flow of supply and demand. Just makes a person giddy! (me at least)

  • Anonymous

    That would be interesting to see, but maybe the shuttering of Best Buy’s physical location will give Amazon some pause…

  • George

    Radio Shack (RSH) is another play on the same theme

  • Anonymous

    Good thinking.