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Submitted By mickey777
Words 378
Pages 2
Eula Aikens
HW Best Buy
Prof. Hardison
Pricing
8/28/2012

In April of this year Best Buy announced that it would be closing fifty stores in the US this year. Amazon.com is believed to be the reason why. The store closing decisions were based on their fiscal fourth quarter sales were well below expectations. Best Buy store closings began in Kansas City, MO and one in Scottsdale AZ and placed stores in the Twin Cities and San Antonio on notice that they will be closing later this year. The company’s expectation is to have a majority of these stores closed by May of this year. Best Buy stated that these actions are being taken with the intention of increasing points of presence at the same time lowering its overall square footage, while expanding flexibility and remodeling of stores with a Connected Store Format as they continue to build upon their Best Buy Mobil stores. Over the past 3 years Best Buy’s income has diminished from 1,317,000 million in February 2010 to 1,277,000 in February 2011 and 1,231,000 as of March 2012. Their basic problems haven’t changed even though the CEO has. Amazon continues to chip away at Best Buy’s market share. Their same store sales have decreased 3.7% across all markets. Wal-Mart and Target both out performed Best Buy during the second quarter. As CEO I would recommend a buy out of the Best Buy appliance store and would hold on to and focus the attention on their mobile phone endeavors. The buyout package the current CEO (Shulze) has in place benefits him more than it does the stockholders or the company. Regardless of the outcome of the takeover the CEO will receive two voting seats on the Board of Directors that consist of eight people.

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