The locally based consumer electronics chain has 85 stores that concentrate on such markets as affluent professionals, who can check out home-theater systems in living room like showrooms, and small businesses, which can choose from an extended line of notebook computers. The company had converted 45 of its stores to this model and plans to convert an addition 150 to 200 more stores to this model this year.
During the quarter, Best Buy opened 11 Best Buy stores in the US, including two 45,000-sf stores, seven 30,000-sf stores and two stores in its 20,000-sf format. The retailer also opened two Best Buy stores and one Future Shop store in Canada.
The company is also pushing to add services through its Geek Squad agents, which now number 8,500 after the company added 1,500 more agents over the last 12 months, says David Schick, a securities analyst with Legg Mason. Best Buy bought the Minnesota-based service company nearly three years ago. Last year, it had added the 24-hour computer support service to all of its Best Buy locations and began a national TV campaign.
Some of the retailer's best-selling items were MP3 players, digital televisions, video games, digital cameras and notebook computers. Those increases offset declining sales of such items as declining product categories, such as desktop computers, analog televisions and cellular phones. Earnings at the country's largest electronics retailer were o $170 million, or 51 cents a share, while sales rose 12% to $6.12 billion.
Best Buy faces increasing competition from such retailers as Wal-Mart, which is expanding sales of televisions, home theater systems and other gear. At the end of the quarter, it had 711 Best Buy stores, including 32 in Canada, 20 Magnolia Audio Video stores and 115 Future Shop stores. In the past 12 months, the company opened 80 new stores and closed three stores.
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