There is not much doubt thatBest Buy (BBY) will go out of business eventually unless it changes the way it does business. Finally there is a big leap at Best Buy to arrest the company’s downward spiral. Best Buy founder and former chairman Richard Schulze has resigned. Schulze owns 20.1% of the company.
Best Buy is under attack on multiple fronts. It is becoming increasingly common for shoppers to go to Best Buy and scope out what they want and then order it from Amazon (AMZN). In some ways Best Buy has simply become a showroom for Amazon. A consumer not wanting to buy online can simply go to Wal-Mart (WMT) and find a reasonably good selection at lower prices than Best Buy.
Apple (AAPL) is progressively taking a higher share of dollars that consumers spend on electronics. Not only the proliferation of Apple stores has hurt Best Buy, but Best Buy also gets hurt when it sells Apple products. The reason is that margins on Apple products are typically lower than other products that Best Buy sells.
Interestingly, the resignation of Schulze comes only two months after Brian Dunn left as CEO. To succeed in the new environment, the top brass of Best Buy has to think out of the box. There is still time for Best Buy to beat Amazon, but Brian Dunn was not much of an out-of-the-box thinker. He did have some good ideas regarding fully integrating in-store and online experience but implementation of his good ideas proceeded at a snail’s pace relative to what was needed…Read more at Forbes
