Best Buy Moving Closer To $11B Buyout

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While we can all agree Best Buy needs a serious overhaul before we'll shop there again, I'm not sure this guy and a $11B check is going to get the job done.

Best Buy Co Inc founder Richard Schulze and at least four private equity firms have started examining the books of the world's largest consumer electronics chain, in early steps toward what could become a potential $11 billion buyout, according to people familiar with the matter.
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Brick and mortar stores like BB are doomed against giants like Amazon. They just can't compete on some levels..

Must be nice to have $11 Billion to waste whenever this guy feels like it.
 
I dont understand how they dont see if they just have lower and competitive prices with amazon then they will sell alot more.
 
As the lone Best Buy fan on here, I hope they get something worked out. I hate to think of Walmart and Radio Shack as being the only place I can walk in to and buy electronics stuff.
 
Godmachine said:
Brick and mortar stores like BB are doomed against giants like Amazon. They just can't compete on some levels..

Must be nice to have $11 Billion to waste whenever this guy feels like it.
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They will as soon as the government finally start taxing online retailers. B&M has an instant gratification advantage over online retailers in addition to not having shipping charges (unless you count driving yourself to the store). Basically the only things making online retailers better are lower cost if you search hard enough or buy used/refurbs, or when you're sure you won't find what you need in local B&M's.
 
MacLeod said:
As the lone Best Buy fan on here, I hope they get something worked out. I hate to think of Walmart and Radio Shack as being the only place I can walk in to and buy electronics stuff.
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Yeah, I shudder at that thought too.

I know a few people who has never heard of Newegg nor has never used Amazon before. Best Buy is good for those kind of people.

However, the kind of practices and attitudes their employees treat their customers, and how they price their products is not going to help them in the long run. Best Buy will need a significant change in business practices, product pricing, and customer handling.

A Radeon 5770 should not cost $100 more than what Newegg would sell them for. Customers shouldn't be haggled or coerced into buying unnecessary and pricey warranty packages. Customers shouldn't have to pay for repairs they don't need when told by Geek Squad. $20 or $25 optimization for something you could do for free yourself?

Nickle-and-diming customers may get you more money, but it's not going to win your more customers when other places online are doing them better.

A lot of things Best Buy has done doesn't make sense, and that needs to change.
 
When I can order from Newegg and for most things (that ship out of NJ) get what I ordered the next day, Best Buy does not even cross my mind anymore. They are good for people with too much money and no patience to research things themselves. I've actually had an easier time returning items to Newegg than BB. If they want to survive they should concentrate their presence in high income areas, and get decent employees. The last few times I was in a BB there were plenty of blue shirts standing around, talking amongst themselves and laughing and texting, while frustrated customers waited at the checkout because there was only one person working checkout. Also, all four of the customer terminals (for searches and Reward Zone stuff) were down.
 
octoberasian said:
...Best Buy is good for those kind of people...

Customers shouldn't have to pay for repairs they don't need when told by Geek Squad. $20 or $25 optimization for something you could do for free yourself?
.
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You can also change your oil for cheaper than what a Quick Lube can do, but a lot of people will pay them just for the convenience. The same with computer optimizations. Although it may be senseless to you to pay someone to remove bloatware, it makes sense to someone who doesnt want to fool with it.

But for the most part I do hate their "salesmen" . They can and will annoy the piss out of you.
 
I absolutely agree. Bestbuy has a really good repair program that should be focused on.

Bestbuy won't win against Newegg as far as price wars.
 
Azhar said:
They will as soon as the government finally start taxing online retailers. B&M has an instant gratification advantage over online retailers in addition to not having shipping charges (unless you count driving yourself to the store). Basically the only things making online retailers better are lower cost if you search hard enough or buy used/refurbs, or when you're sure you won't find what you need in local B&M's.
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Amazon started charging sales tax in California, so I pay that now. Still buy most everything online for the huge selection, lower cost, and ease of shopping whenever and whereever I want. For me, sales tax on Amazon has only made newegg.com and staples.com more competitive with Amazon, but I still shop online more than brick and mortar.
 
i haven't stepped into a best buy in years. they still selling those $40 usb and hdmi cables?
 
They better not go out of business. BB is the only place I will buy cell phones. Their Black Tie/GSP insurance beats all carrier insurance hands down.
 
tesfaye said:
How is Best Buy valued at $11bn?
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This echoes my thoughts. The problem is that Best Buy has earned a fairly bad reputation and it's deserved in a lot of cases. The problem with giant brick and mortar chains like that is that they are burdened with bureaucracy and far too much internal political BS which makes changing strategies too slow a process. They fail to adapt to changing market conditions because their size and way of thinking makes them far too rigid to do so.

A better strategy would be to wait for the company to fall under, then buy the rights to the name and simply slap it on a new company that's more flexible. If you've got a good strategy for the new business model, you can bring over whatever talent you can salvage from the old operation assuming there is any. (It doesn't seem likely, but there could be a few people worth saving.) This way you do not carry over the baggage, employees, and debts from the old company. Sometimes it's best to wipe the slate clean and start from scratch. Best Buy may be too large an organization to fix in a timely manner.
 
MacLeod said:
As the lone Best Buy fan on here, I hope they get something worked out. I hate to think of Walmart and Radio Shack as being the only place I can walk in to and buy electronics stuff.
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At first I was somewhat excited moving into a city with a BB. After having lived here for 5 years, I will say that it's irrelevant to me.

Radio shack carries many things that BB would never touch, capacitors, switches, circuit boards, basically DIY electronics. Being DIY computer guys, none of us really need BB.

If they started carrying cpu/mobo combos & parts like Frys/Microcenter, then it'd be a different story.
 
I have to say that as a former employee, Best Buy was best ran under Schulze. That isn't saying much compared to how it is now though in some respects and yet I can't help but feel like there was a stark contrast to now. People complain about Best Buy for various reasons and to me it seems like these complaints have only been magnified since his leave.

On a recent visit to the store I worked at it was an amazing difference in atmosphere. The old timers I worked with were still on their hustle and doing as I always remembered them doing, but all the new people were a bunch of shiftless meatbags in blue shirts and khakis. One guy I asked if they carried something even seemed to act like I was ruining his day by just being there and asking him. To me, that says a lot about the quality of people the company has allowed into it since Schulze left. Shit like that was a huge no no, and everyone in management understood that very well.
 
SamuraiInBlack said:
I have to say that as a former employee, Best Buy was best ran under Schulze. That isn't saying much compared to how it is now though in some respects and yet I can't help but feel like there was a stark contrast to now. People complain about Best Buy for various reasons and to me it seems like these complaints have only been magnified since his leave.

On a recent visit to the store I worked at it was an amazing difference in atmosphere. The old timers I worked with were still on their hustle and doing as I always remembered them doing, but all the new people were a bunch of shiftless meatbags in blue shirts and khakis. One guy I asked if they carried something even seemed to act like I was ruining his day by just being there and asking him. To me, that says a lot about the quality of people the company has allowed into it since Schulze left. Shit like that was a huge no no, and everyone in management understood that very well.
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Back in the day managers were held accountable for their actions and the performance of their stores. I saw one general manager who was the GM on Friday and Monday he was busted down to loss prevention duty for a short time prior to being officially shit canned.
 
As I see the future; B&M retail establishments of this type are becoming a thing of the past.
They offer no better service or satisfaction than an Amazon or NewEgg.
For those that like to go finger what they want to buy before hand, here is a place to do it.
But many admit they buy the product after a demonstration at BestBuy from an online retailer because of the substantial savings.
 
Well sadly I have to say I can understand how places like BB still exist. An online friend was recently asked if he had an SSD since he loaded so fast. He said "I dunno, I know it has quad something in it. I just went into BB and told them to build me the best computer".... I literally cringed when I heard him make this statement. Some people have absolutely no knowledge of computers beyond it works and I can play games on it and this makes me sad.

/facepalm
 
Azhar said:
They will as soon as the government finally start taxing online retailers. B&M has an instant gratification advantage over online retailers in addition to not having shipping charges (unless you count driving yourself to the store). Basically the only things making online retailers better are lower cost if you search hard enough or buy used/refurbs, or when you're sure you won't find what you need in local B&M's.
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Places like Amazon will still have the advantage over B&M since Amazon will still operate as a shipping company from large distribution centers instead of paying for retail space like Best Buy. Especially once Amazon starts opening its same-day shipping drop spots.
 
Dr. Righteous said:
As I see the future; B&M retail establishments of this type are becoming a thing of the past.
They offer no better service or satisfaction than an Amazon or NewEgg.
For those that like to go finger what they want to buy before hand, here is a place to do it.
But many admit they buy the product after a demonstration at BestBuy from an online retailer because of the substantial savings.
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I do. I check out the item in person and know what it should cost before walking into the store. If the cost is completely out of sync in retail with what it is online, I'll buy online.
 
Godmachine said:
Brick and mortar stores like BB are doomed against giants like Amazon. They just can't compete on some levels..

Must be nice to have $11 Billion to waste whenever this guy feels like it.
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Microcenter seems to be doing just fine. Maybe BB needs MC to buy them out.
 
Ashbringer said:
Microcenter seems to be doing just fine. Maybe BB needs MC to buy them out.
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Well Microcenter has less overhead and inventory than Best Buy does and they cater to a specific market. It's almost a niche store with a few high margin, big ticket items and high margin cables to keep them going. That and Fry's are practically the only game in town if you need computer parts in a hurry.
 
octoberasian said:
However, the kind of practices and attitudes their employees treat their customers, and how they price their products is not going to help them in the long run. Best Buy will need a significant change in business practices, product pricing, and customer handling.
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Actually, Best Buy is ideal for the NewEgg/Amazon customer who knows what he wants before he walks into the store--but who doesn't
want to pay ridiculous "overnight shipping" charges and who wants what he wants *now*...;) He doesn't need to talk to salesmen because he knows what he wants and if they pester them he just tells them, politely, "thanks, but no thanks, I don't need your help"...and that takes care of that.

But along those lines, whenever I happen to meet a salesman who is experienced and honest--rare, indeed--every once in a blue moon the guy might actually suggest something I had not thought about that actually would work out better than what I had planned to buy before coming into the store. That doesn't happen in the mail-order outfits at all, because it can't, since you have no personal contact with anyone during the entire purchasing process.

The overnight shipping thing is really funny, too, as not only is it very expensive, both Amazon and NewEgg have small-print language explaining that it "might" take a day or two to "process" your order and *THEN* they'll ship it overnight. That amounts to three-day shipping--and the overnight money is just blown. I'm sure that they do ship a lot of stuff successfully in one day--if they didn't there'd be no sense in advertising the availability of the service because no one would ever opt for it. But it's certainly true that for either of these mail-order businesses, "overnight delivery" is often not overnight at all--but the customer still pays for it.

It's also great having a local party who you can yell at when something goes wrong--as opposed to talking to someone on the phone that you will probably never talk to again, in your life...;) And then doing the tedious RMA thing with the product manufacturer. I've bought things from BB, unboxed them at home to see that something was missing or not working properly, and have returned the package and exchanged it for another new one right off the shelf--in the same afternoon! That kind of service turnaround is impossible for either New Egg or Amazon, of course.

Lots of people like to hold their purchases in their hands before buying them. Nothing unusual about that, either.

Last, take a look at the booming brick & mortar Apple stores--even though Apple also offers an online store--its own physical stores see a high demand of customer interest. Ditto, Microsoft with its physical stores.

And that's the part that the anti-Best Buy crowd doesn't comprehend: many people like to shop in a "real" store with merchandise they can hold in their hands and examine before buying, and contrast with other in-stock products, too. Stores like NewEgg and Amazon are just as brick & mortar as anywhere else (because you really cannot stock merchandise in cyberspace--it won't fit...;)) The *only* difference is that for many people a NewEgg or Amazon store is *not local* and so they have to purchase from them online. But New Egg and Amazon are still very much physical businesses which exist in brick & mortar buildings and store fronts, believe it or not...;)

A Radeon 5770 should not cost $100 more than what Newegg would sell them for. Customers shouldn't be haggled or coerced into buying unnecessary and pricey warranty packages. Customers shouldn't have to pay for repairs they don't need when told by Geek Squad. $20 or $25 optimization for something you could do for free yourself?
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Actually, a Radeon 5770 is worth what the market will bear--that is, what a person will pay to have one. To some people the difference of $100 is chump change, and they may want to support their local businesses as opposed to non-local businesses--they like the fact that the store stocks these items and that they can see and hold them in their hands before buying them, that they can handle returns locally, etc.

As far as being "hassled about warranties" and so on--just say "No!" I've done it may times myself--it's easier than easy. As far as the Geek Squad goes--if these people knew how to optimize their drives themselves then they wouldn't be waiting on the Geek Squad, would they? Yes, the Geek Squad is way over-priced to my way of thinking--but that's because I know what I'm doing. You might want to consider that for people who have no clue as to what they are doing the Geek Squad is a Godsend and may even seem like an incredible bargain to these folks.

A lot of things Best Buy has done doesn't make sense, and that needs to change.
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Honestly, if you are someone who is clueless about the technology you want to buy or need to buy, then Best Buy makes a lot of sense. As much sense, surely, as brick & mortar Microsoft and Apple stores make--and their businesses are booming. No sign of slowdown there. So I don't see the Best Buy problems as having anything to do with "brick & mortar," etc., but rather I see them as simply Best Buy's particular internal management problems. IIRC, Best Buy boomed under the original owners up until the company was sold--and it looks like the new guys just mismanaged a bunch of things. Then, too, like about every other company, BB has felt the economic crunch from the Obama administration's brain-dead economic policies for the last four years. Sorry to have to tell Obama & Co. that "blaming George Bush" is not a viable political plank in 2012, and neither is it an economic stimulus.

I like NE and Amzn, very much actually--it's just that I have no particular ax to grind with BB, and for some people the Apple/Microsoft/Best Buy brick & mortar storefront is just the ticket.
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goodcooper said:
i was wondering the same... but they probably got a lot in real estate...
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One very expensive risk Best Buy took was the over-saturation of their stores, building them in borderline rural/small suburbs where they thought was going to have future home development before the housing bubble collapsed and having to close them due to lackluster sales compared to their stores in densely populated areas.
 
This type of industry has demographic issues in the long run, once the individuals who cannot figure this stuff out for themselves die off, the business model is totally bust. I worked at Best Buy for a year and absolutely hated it, most of the clientele is much older.
 
octoberasian said:
$20 or $25 optimization for something you could do for free yourself?
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How unethical of them. Same with people who pay others to wash their car. I mean, they can do it themselves for free, right?

If you're looking to buy GPUs at Best Buy you're doing it wrong. Its a general electronic/media store not a desktop PC enthusiast store.
 
Flogger23m said:
How unethical of them. Same with people who pay others to wash their car. I mean, they can do it themselves for free, right?

If you're looking to buy GPUs at Best Buy you're doing it wrong. Its a general electronic/media store not a desktop PC enthusiast store.
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They used to want computers pre-optimized, they would have an anti-virus installed, some registry tweaks applied, updates performed, and recovery media created. They would charge $99, they have a much better service called tech support which covers all the above for $99/yr with a PC purchase as well. The only server that wouldn't be covered would be recovery media creation which I believe was $39.99 or $49.99 but you could get a 15% discount with Tech Support. They would regularly sell tech support and the full priced setup service rather than simply charging for the recovery media. The PC setups were a horrible value, they also are not supposed to be removing the bloatware as I believe the vendors pay them to put it on (Per the geeksquad forums).
 
Flogger23m said:
How unethical of them. Same with people who pay others to wash their car. I mean, they can do it themselves for free, right?

If you're looking to buy GPUs at Best Buy you're doing it wrong. Its a general electronic/media store not a desktop PC enthusiast store.
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Exactly. This is why comparisons between Best Buy and Microcenter make little sense.
 
Azhar said:
They will as soon as the government finally start taxing online retailers. B&M has an instant gratification advantage over online retailers in addition to not having shipping charges (unless you count driving yourself to the store). Basically the only things making online retailers better are lower cost if you search hard enough or buy used/refurbs, or when you're sure you won't find what you need in local B&M's.
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And that you can get free shipping through Amazon with a prime membership and you don't have to leave your home to go to some overly crowded and visually overwhelming B&M with employee's that have no idea what they are talking about basically giving constant bad advice.

Even if they start taxing online retailers they still have the advantage.
 
Flogger23m said:
How unethical of them. Same with people who pay others to wash their car. I mean, they can do it themselves for free, right?

If you're looking to buy GPUs at Best Buy you're doing it wrong. Its a general electronic/media store not a desktop PC enthusiast store.
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The difference is much greater. For example, they can upgrade your consoles software for a fee. That is something that you can do with a few push of buttons. A car wash is back breaking work you may not want to do.

Best Buy's problem has always been their exuberant prices and horrible staff. Things like how to upgrade your console should be free advice. This company is a classic example of what happens when you get too greedy, you tend to lose everything.
 
Dan_D said:
Well Microcenter has less overhead and inventory than Best Buy does and they cater to a specific market. It's almost a niche store with a few high margin, big ticket items and high margin cables to keep them going. That and Fry's are practically the only game in town if you need computer parts in a hurry.
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I would say Best Buy is more general, while MS is more computer nerd specific. But I wouldn't say necessarily MC has a fewer number of SKU's. Their product line just takes up less space. You won't find refrigerators, washing machines or car radios. But you will find 5 or more CPU's from Intel and AMD. You will find 10 motherboards and probably 20 different types of CPU/Fans.

I think MC or Fry's are more targeted to their customer while BB just stocks a little bit of everything (at far higher prices then MC or online) hoping someone will come in and need to buy something.
 
kac77 said:
I would say Best Buy is more general, while MS is more computer nerd specific. But I wouldn't say necessarily MC has a fewer number of SKU's. Their product line just takes up less space. You won't find refrigerators, washing machines or car radios. But you will find 5 or more CPU's from Intel and AMD. You will find 10 motherboards and probably 20 different types of CPU/Fans.

I think MC or Fry's are more targeted to their customer while BB just stocks a little bit of everything (at far higher prices then MC or online) hoping someone will come in and need to buy something.
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Microcenter carries way more than 10 motherboards but I get your point. Fry's however stocks the same crap Best Buy does and a lot more. They practically have the inventory of both but they have lower prices than Best Buy does.
 
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