Best Buy eyes growth outside of its big-box heritage
ST. PAUL Best Buy says its future growth will come beyond the big blue box. The Richfield-based electronics giant unveiled a plan Thursday that will shrink its big-box square footage by 10 percent in the next three to five years. But it foresees ...
Best Buy says its future growth will come beyond the big blue box.
The Richfield-based electronics giant unveiled a plan Thursday that will shrink its big-box square footage by 10 percent in the next three to five years.
But it foresees growth coming in other ways: in its small, mall-based Best Buy Mobile stores; its online presence and its busy Five Star stores in China.
The company announced:
--Best Buy Mobile stand-alone stores will expand to an estimated 600 to 800 U.S. locations within five years. Those small mall-based stores sell mostly smartphones and tablets, the two hottest categories in the consumer-electronics market.
--Best Buy will increase its online efforts, which now generate revenue of $2 billion a year. Its goal is "significantly expanding Best Buy's online presence in the United States," aiming to double revenues in three to five years.
--In China, the Best Buy name is being shut down in favor of the more-lucrative Five Star, Best Buy's brand in China. The company believes it can double its revenues to $4 billion within five years.
--It sees growth opportunities as well beyond consumer electronic devices, expanding into "accessories, content, connections and services." The company sees this market as a $420-billion-a-year market, which it describes as "more than 2.5 times the traditional consumer electronics hardware market."
The company is holding an analysts meeting at its headquarters in Richfield where it is announcing
Shares of BBY were down about 1 percent Thursday in morning trading, down 35 cents to $29.90.
Wall Street has been icy toward Best Buy, as it faces competitive threats from online retailers, discounters and manufacturers that sell directly. Brian Dunn, Best Buy's chief executive, took on the critics directly, as he spoke to stock analysts.
"Our intent today is to help you understand why Best Buy not only remains relevant in today's ecosystem, but why we are uniquely positioned to win," Dunn said.
Distributed by McClatchy-Tribune Information Services.