The Big Story Blog

Is Best Buy built for the long haul?

Posted at 6:20 AM on January 6, 2012 by Paul Tosto
Filed under: Economy

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(Photo by Justin Sullivan/Getty Images)

"Electronics retailer Best Buy is headed for the exits," Forbes correspondent Larry Downes wrote this week in a scathing analysis of the retailer and its future. " I can't say when exactly, but my guess is that it's only a matter of time, maybe a few more years."

He went on to dissect the company's strategy, its customer service woes and declining fortunes. Forbes' managing editor wryly noted that more people would read the Forbes critique of Best Buy during the week than shop at Best Buy.

On Thursday, Bloomberg News wrote Best Buy, headquartered in Richfield, could be a great buyout candidate:

After losing almost a third of its market value in 2011, the world's largest seller of consumer electronics is now valued at just 3.6 times its free cash flow, the cheapest of any retailer worth more than $1 billion... Best Buy, one of the five worst-performing retail stocks in the Standard & Poor's 500 Index last year, has also reached its cheapest valuation relative to earnings.
This kind of talk would have been hard to imagine three years ago, when Circuit City, the other big retail electronics giant with stores across the country, filed for bankruptcy and eventually liquidated its stores. But Amazon.com and Wal-Mart are formidable competitors.

We'll get a better picture of Best Buy's financial health today, when the retailer releases its crucial December sales figures.

Even good news, though, may not stop questions about the company's future.

We'll spend the day on Big Story Blog looking at Best Buy's future, examining the December sales data and what's being written and get perspective from Minnesotans in the MPR News Public Insight Network about their Best Buy experiences. Join in.


About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.