Report by JENIFERLAMUG
Best Buy Co., North America’s largest specialty retailer of consumer electronics, personal computers, entertainment software and appliances had announced on Thursday to close 50 of its big box stores in the U.S. after it posted a fiscal fourth quarter loss partly due to restructuring charges. Instead, the company will open 100 smaller and more profitable Best Buy Mobile stores in fiscal 2013.
"We're clearly going to have more doors and less square footage," CEO Brian Dunn told Bloomberg.
The company’s plan would also mean to cut 400 corporate jobs and trim $800 million in costs by fiscal 2015.
Reportedly, Best Buy lost worth $1.7 billion or $4.89 per share which ended March 3, comparing with a profit of $651 million, or $1.62 per share, a year ago.
The struggling chain, which has about 1, 400 chain of store in the U.S. unveiled its loses for the full year with $1.23 billion or $3.36 per share, compared with a profit of $1.28 billion, or $3.08 per share, in the prior year, as sales of electronic gadgets have weakened, the Los Angeles Times reported.
The Minneapolis based company expects to reduce about $250 million of its costs in fiscal 2013. Looking forward, Best Buy forecasts fiscal 2013 earnings of $2.85 to $3.25 per share and adjusted earnings of $3.50 to $3.80 per share. Analysts expect earnings of $3.67 per share, the post suggests.
Matthew Fassler, Goldman Sachs analyst said "The firm is taking incremental steps to address its strategic challenges. That said, the soft close to the quarter, and subdued sales guidance, suggest that competitive pressure may be drifting into market share as well as margin."
In order to compete better along with rivals, Best Buy said it will focus on trained sales staff in assisting customers to get the most out of their gadgets.