Best Buy not worth a buyout: report
As sales fall, RayJay's Wewer says the chain can't afford debt
Best Buy not worth a buyout: report
Joseph N. DiStefano
Best Buy sales have been falling so steadily (see third-quarter loss report here), it's not worth the money it would cost a buyout firm to attempt a takeover and reorganization, writes analyst Dan Wewer, in a report to clients of Raymond James & Associates.
"Best Buy finished (its) third quarter with just $309 million of cash, down from $2.1 billion a year ago," and writeoffs have cut shareholders' equity to $4.1 billion, down from $6.6 billion a year ago, he wrote, citing the chain's increased dependence on low-margin smartphones and appliances. "We do not understand why Best Buy would be an attractive LBO candidate. The combination of significant comp sales declines, general margin (percentage) contraction, and intense competitive pressures is not a business model that can support the massive levels of debt required in an LBO." Picture could change after Christmas sales, but Wewer's not holding his breath.
best buys is the worst electronic retailer out there, richard schultz is living in a bubble if he thinks his old methodss would work today. online and mass merchandisers have made retailers like best buys outdated and overpriced, i for one will never set foot in one of their stores ever again because of poor geek squad service and rebuilt merchandise sold as new, i can only pray they shutdown and rid the retail landscape of their stinky service, die best buy die !— eddiot
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LBO, cash flow enough for 2 Twinkie buyouts, but not enough for consumer electronics? That does not add up.- brick and mortar stores much like best buy are under attack, all the computers they sold for decades have changed the facxe of retail marketing and they are the blame and the cause. personally i was treated so badily not only by their " geek squad and retail consultants i would never set foot in another on of their stores, walmart, sears, k-mart stand a better chance of getting my business because of a better selection and prices as well. if richard schlutz thinks his marketing plan for 30 years ago will work again, he's living in fantasy land, just let them die and let other more friendly retailers pick up the clients " all good things must come to an end "— eddiot
