Tag Archives: Circuit City

Business, Finance, Occupation & Industry

Are Best Buy and Samsung Making J.C. Penney's Mistake?

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By Austin Smith and Eric Bleeker, CFA, The Motley Fool

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J.C. Penney‘s big turnaround pivoted on the idea of a store-within-a-store shopping experience. The radical shift had Wall Street enamored at first, but the novel concept is far from new. The design has been tried with mixed success across all varieties of bricks-and-mortar retailers. 

Best Buy is the most recent dying retailer to attempt such a move after announcing its partnership with Samsung to create retail shops within larger Best Buy stores. There are echoes here not just of J.C. Penney’s attempted strategy, but also of Apple‘s own experience inside Target stores today and Circuit City stores of yesteryear. 

Whether Best Buy and Samsung can pull off an Apple retail success will depend on their execution, but what seems on the surface to be a mimicking of J.C. Penney’s ill-fated strategy is actually rather different. Check out the following video for more details.

One thing is for sure: The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they’ll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool’s special report. Uncovering these top picks is free today; just click here to read more.

The article Are Best Buy and Samsung Making J.C. Penney’s Mistake? originally appeared on Fool.com.


Austin Smith owns shares of Apple. Eric Bleeker, CFA, has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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From: http://www.dailyfinance.com/2013/04/14/are-best-buy-and-samsung-making-jc-penneys-mistake/

Business, Finance, Occupation & Industry

Target's Latest Electronics Disaster: Best Buy and RadioShack

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By Rich Duprey, The Motley Fool

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One of the things electronics retailer Best Buy had hoped to use to set itself off from the competition and thwart the effects of “showrooming” from online rival Amazon.com , was its tech support staff that could set up, install, and repair the electronic gadgets and products it sold. Providing service through its Geek Squad instead of just offering product and price would be a key differentiator for it.

It hasn’t quite worked out that way, but seeking out opportunities to expand the brand has led it to partnerships in some unlikely places, like at eBay, where it offers tech support on gadgets won at auction or bought at the site, but also at more traditional retailers such as Target .

In search of pocket protectors
Yet much like its homegrown efforts, the branding opportunities seem to be hit or miss. Earlier this week, Target announced it was severing its relationship with the tech guys in the black-and-white Volkswagen Beetles, saying the six-month experiment had run its course and it was not renewing the partnership.

The discount retailer has been in sort of an identity crisis of its own lately, throwing a lot of options at the wall to see what sticks in an effort to jump-start sales. When it comes to electronics, however, not much has clung as it also recently ended its failed store-within-a-store kiosk concept it had with Radio Shack .

Unlike the Radio Shack pairing, where there were some 1,400 kiosks set up in its stores, Target’s foray into tech support was much more limited — just 29 stores in Denver and Minneapolis. In both cases, though, the problem doesn’t seem to exist within the electronics retailers, but rather that Target isn’t exactly a destination spot for gadgetry. Its lineup of products may be solid, but analysts have noted they haven’t been as aggressive as their peers in cutting prices.

Shades of Circuit City
Target’s hardlines division includes electronics (as well as video game hardware and software), but also music, movies, books, computer software, sporting goods, and toys. Even so, it represented only 18% of the retailer’s revenues in 2012, down from 20% two years ago. In the fourth quarter, the segment suffered a drop in sales in the mid-single digits, with electronics themselves experiencing the worst falloff.

That’s probably what led Target to agree to a year-round price-matching scheme, as Best Buy did, to meet the threat that Amazon poses. That still might not be enough to fend off its middle-of-the-road strategy, straddling the deep discount world of Wal-Mart on one side and mid-tier retailers such as Kohl’s, Macy’s, and J.C. Penney on the other. 

After all, the only thing usually found in the middle of the road are dead opossums and flattened squirrels. And if it wants to avoid that fate, Target’s going to need more than cute tricks like wireless kiosks and tech geeks to revive its electronic sales strategy.

Circuit overload
The battle between bricks-and-mortar stores and e-commerce …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

March Madness Special: 2 Underdog Stocks Looking to Upset Analysts Next Quarter

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By Sean Williams, The Motley Fool

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The rally since the stock market bottomed out four years ago has been nothing short of ferocious and phenomenal. There are quite a few companies that have returned greater than 1,000% since the bottom. Conversely, a handful of formerly great brand-name companies that hit rock-bottom have yet to truly recover.

In the spirit of NCAA March Madness and broken brackets everywhere (including mine), I propose to examine two large business models that look to be on the mend and could very easily upset a majority of analysts by reporting a big upside profit surprise next quarter.

Best Buy
Some analysts have proudly proclaimed the death of big-box retailing and used the dissolution of Circuit City as evidence that the large-scale electronics store simply couldn’t survive. With Best Buy‘s sales in the doldrums and shoppers admitting to using Best Buy‘s showrooms as show-and-tell forums while purchasing items on Amazon.com for less at a later time, there was a period where these analysts appeared to hit the nail on the head. Poor leadership had failed to see a rapid push toward mobile devices and cost-consciousness, and it cost Best Buy severely.

However, new CEO Hubert Joly, who is a specialist at turning around aching businesses, has developed the perfect plan to right the ship.

The most dramatic departure from Best Buy‘s previous pricing strategy is that it plans to match prices — including online prices — in an effort to stop “showrooming.” Forbes called the action a “late salvo,” but I feel it’s the perfect time to go after Amazon. You see, Amazon is beginning to feel the effects of having various states around the U.S. requiring it to collect sales tax. One of its biggest advantages had been its ability to subvert state taxation, which made its products appear noticeably cheaper. With California and Pennsylvania starting to collect tax last September, and New Jersey, Virginia, Indiana, Nevada, Tennessee, and South Carolina set to be added to the list between 2013 and 2016, Amazon is seeing its comparative advantage slowly slip away. Thus, it makes complete sense for Best Buy, now, to step up and match Amazon’s prices to give the customer both the convenience of trying out its various products and the ability to purchase knowing they’re getting the best price.

A focus on mobile products and a slimming down of its store size are other key components to the turnaround campaign. Joly understands that mobile devices (e.g., smartphones and tablets) are what’s driving consumers into the stores, not just televisions and appliances anymore. With a focus on the right phones and tablets, Best Buy will have won half the battle, getting the customer into the store.

For the other half of that battle, Best Buy will be offering incentives to its sales associates (a marked difference from years past) to make sales, which should ultimately help drive customer service and provide the differentiation factor that customers …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

4 Lessons From the Dow's 4-Year Bull Market

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By Dan Caplinger, The Motley Fool

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Today marks the fourth anniversary of the day that the Dow Jones Industrial Average hit bottom during the financial crisis and ensuing market meltdown. Since then, investors have seen a whirlwind bull market in which just about every U.S. major-market benchmark has at least doubled.

Four years on, the market has taught attentive investors a number of valuable lessons about investing. To commemorate the occasion, let me share four of the most important lessons that are relevant not just in the current bull market but also for your investing strategy throughout your lifetime.

1. Markets take longer to rise than to fall.
The Dow’s rebound from its March 2009 lows has been truly spectacular. Although the biggest part of the Dow’s recovery came before the 2009 calendar year ended, the stock market has repeatedly defied calls that the bounce would be short-lived. Subsequent years included less dramatic but still substantial gains, culminating in this past week’s set of new record closes for the Dow.

But patience has been a key attribute for investors, because as impressive as the bull market has been, it has taken a lot longer to regain the Dow’s record levels than it did for the Dow to lose more than half its value from its 2007 highs. In just 17 months, the Dow lost more than half its value from its previous record, but it took almost three times that long for it to get back to that same level.

Losses are tough to endure, but successful investors have to know how to wait. This bull market proves that at least some of the time, that patience is rewarded.

2. Not all stocks are created equal.
With the stock market having doubled, many investors figure that just about every stock managed to post gains. But there have definitely been winners and losers during the bull-market run, and a few stocks have missed out entirely.

Outright losers among large caps have been few and far between, with just 10 of the stocks in the S&P 500 losing ground after dividends in the past four years. They all have stories behind them. Here are a few:

  • First Solar , for instance, has had to endure falling prices for solar panels throughout the past four years, along with huge reductions in subsidies from various governments around the world.
  • Best Buy‘s travails are well known, as it apparently won the big-box electronics retail battle by defeating Circuit City only to find itself falling victim to competition from beyond its brick-and-mortar space.
  • Exelon is a giant in the nuclear-energy space, which took a big hit when the Japanese Fukushima Daiichi nuclear-power plant disaster happened back in 2011. Subsequently, a big drop in natural gas prices reduced the relative cost advantage of nuclear power, cutting Exelon’s margins and leaving it struggling to support its dividend.

You’ll find similar stories behind each of the other large-cap stocks that fell. But look at the broader market, …read more
Source: FULL ARTICLE at DailyFinance