Executive Briefings

Best Buy Embarks on 'Transformational' Plan to Combat Online Competition

Weighed down by the size of its big-box stores and facing competition from more nimble online-only competitors, Best Buy is embarking on a "transformational strategy," its executives said. For the company's finance chief, Jim Muehlbauer, that will mean dealing with $800m in cost cuts over the next three years.

Those savings will come in the form of 50 store closings, the elimination of 400 corporate and support jobs, and a decrease in the cost of goods sold. Muehlbauer said that through negotiations with vendors, the company will see lower expenses related to product returns and exchanges. He also expects to see savings from cutbacks in the use of information-technology consulting services.

Best Buy will earn between $50bn and $51bn in revenue during its fiscal year 2013, similar to the final number reported for the year it just finished up, Muehlbauer said.

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Those savings will come in the form of 50 store closings, the elimination of 400 corporate and support jobs, and a decrease in the cost of goods sold. Muehlbauer said that through negotiations with vendors, the company will see lower expenses related to product returns and exchanges. He also expects to see savings from cutbacks in the use of information-technology consulting services.

Best Buy will earn between $50bn and $51bn in revenue during its fiscal year 2013, similar to the final number reported for the year it just finished up, Muehlbauer said.

Read Full Article