Friday, November 27, 2015

Best Buy could close stores without warning: report

"It would only serve to scare vendors, landlords and employees" to announce store closings are on the way, says Janney's David Strasser

Best Buy could close stores without warning: report


"We would like to see more thought put into [a] more aggressive store closure strategy" at Best Buy Corp., says Janney Capital Markets analyst David Strasser, after watching Best Buy shares sink below $29, down from $48 last Spring, on disappointing sales and a build-up of unsold personal computers and other inventory.

"But even if they did plan on closing stores, they would do that well before making it public. It would only serve to scare vendors, landlords and employees" to announce closings are on the way, Strasser adds.

Yet Strasser says investors have overreacted, and clients should buy, not sell, the stock at current prices: "The company is moving in the right direction" by investing in smart phones, tablet computers, and electronic commerce, as personal computer sales and profits fall.

Things at Best Buy looks worse to bond analyst Carol Levenson at Gimme Credit. "Sales slumped badly" as "television sales continue to plunge," and "higher mobile phone and tablet sales were not enough to offset the decline in notebook computers," she told clients in a note, citing figures for the Christmas season and since.

Best Buy nvested more than $1 billion last year buying back its own shares to prop up the stock - half with borrowed money - and may do it again this year. Since Best Buy's own projections call for a "fourth straight year of flattish to down sales" at a time when most retailers are growing again, Levenson is warning bond buyers to stay away.

We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.
Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy: comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

Read 0 comments
comments powered by Disqus
About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph at or 215 854 5194.

Joseph DiStefano
Also on
letter icon Newsletter