Schafer: Schulze's baby could turn into RadioShack

  • Article by: LEE SCHAFER , Star Tribune
  • Updated: June 17, 2012 - 10:35 AM
  • 13
  • Comments

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FrankLJun. 16, 1210:19 PM

Perhaps a 2 prong strategy, a few large stores per metro area modeled on Fry's, where serious customers can buy parts they need with lots of impulse purchases. The small stores for selling cellphones etc, and a pickup point for web site purchases. Stop fighting WalMart for the low end customers.

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essdee09Jun. 16, 1210:43 PM

Dick Schulze is no dope. But I think he's about ten years too late. BBUY is stuck with these huge buildings when almost all of the products they're selling are shrinking: LCD TVs instead of tube TVs, downloaded music and video versus discs in jackets, and the disappearance of point-and-shoot camera and MP3 players as those functions can now be found on even cheap cell phones. How did BBUY not see that coming?

You also have to wonder how BBUY could become the butt of national criticism about insanely expensive video cables, know-nothing reps,and the "enthusiasm" with which extended warranties are pitched -- and no one on Executive Row seemed to notice. Are they THAT insulated?

BBUY's best bet is to try to sell itself to Amazon or some would-be Amazon competitor as the showroom where you play with the goods before ordering on-line. Certainly it will be very hard for (what is left of) the BBUY executive team to think their way out of this.

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TenaciousDJun. 16, 1211:15 PM

It occurred to me while reading this article that I feel the same way about Best Buy as I do about church: I love having vibrant, busy churches in my neighborhood and I value the structure they bring to society... but I'm just not willing to be one of the people sitting in the pew on Sunday. I lament the decline of our job-providing traditional retail structure just as I do our traditional faith-based culture: as a secular observer, shopping online. But I don't feel it is laziness on my part; these instutitions committed the same error in refusing to change with society and thereby alienating me and others. I cannot accept centuries-old dogma any more than I can tolerate the sales pitch for some BS extended warranty.

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fentanylJun. 17, 1210:54 AM

The interim CEO is completely unqualified to lead BB. Mikan Has a sketchy resume with a large employment gap since leaving UHC. You can only schmooze and coast for a so long on your families name.

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pitythefoolsJun. 17, 12 6:23 PM

Dick, slowly sell your shares and quietly back away. Good Lord, you worked hard enough to build the company. Let the "professional" managers take over and do what they will. Enjoy your retirement, you have enough money to do anything you might want to do. Except get younger. You're only going to live so long. You've given enough to the company.

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george13Jun. 18, 12 5:08 AM

In all the analyses I've read about the troubles of BB I still haven't seen any mention of the main reason they failed- that is the obnoxious selling of their worthless extended warranties. Way back in the day (ca. 1990) I would try to shop BB, only to be repulsed by a youngster trying to sell me an extended warranty even before I picked out the product!

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holmanJun. 18, 12 8:57 AM

For me it is going to come down to a question of on-hand inventory, and by that I mean diversity of in-store selection. Online shopping is whipping retail because you can find and buy just about anything you can think of. Retail inventory, from what I see at Wal-Mart, Target, and Best Buy, is doing the opposite--shrinking total products available. RadioShack--some locations anyway--crams a lot of different products into a small store footprint. I've found things at RadioShack that I couldn't find at Best Buy. So who knows, it might not be all bad.

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detachedJun. 18, 1210:54 AM

Best Buy exists solely to sell technology, which by nature is coldly unsympathetic and darwinian-innovate(fast!) or perish. Best Buy is forced to embrace that essence while at the same time becoming a casualty of it. There is nothing unique or quaint about Best Buy that attracts loyalty, like the corner bakery that has really great scones. The only thing Best Buy can do is sell more and cheaper-but it can't do that when requiring customers to burn expensive gas to drive to expensive bricks and mortar buildings in order to pay the same or more, plus sales tax. Best Buy is an aging T-rex looking up at an incoming Amazonian meteor. Best Buy either needs to go exclusively online, like Amazon, or install a bakery in its stores that has really great scones.

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audiophileguyJun. 18, 12 6:36 PM

Anybody who has watched consumer electronics sales over the past 40 years will sadly notice that every single big box retailer has suffered the same fate. A very aggressive regional chain decides to go public. Then the chain expands until they reach a certain market saturation point. Prior to reaching market saturation, the annual addition of new stores and locations can continue to make it appear that sales are increasing every year with virtually unlimited potential. However, after market saturation is reached (which happened to Best Buy within the past two years), the flat or even lower same store sales numbers begin to make it clear that there is no more growth possible within the model. After this becomes obvious to shareholders, the share price plummets, the shareholders demand cost cuts, and the entire chain begins the slow process of implosion. There are over a dozen previous iterations of Best Buy, and the story always ends the same. If Mr. Schulze is as smart as I believe he is, he will come to recognize that there is no better time to unload your stocks than yesterday.

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essdee09Jun. 18, 1210:15 PM

@detached, I agree with a lot of what you said, but lots and lots of people burn gas to get to Apple Stores and Apple is riding high. Obviously bricks and mortar work for Apple. So what is different about the two retail presences that makes one a success and puts the other one at death's door?

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