What's next for Best Buy after dismal 3rd quarter?

8:13 AM, Nov 21, 2012   |    comments
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RICHFIELD, Minnesota -- Going into the busiest and most important part of the retail year, Minnesota-based Best Buy does not have much momentum. Best Buy announced a net loss from continuing operations of $13 million for the 3rd quarter.

"Best Buy's third quarter financial performance was clearly unsatisfactory," New CEO Hubert Joly said in a news release. He also talked about Renew Blue, a set of priorities to re-invigorate performance and rejuvenate the company.

"It's an important time for them," U of M Marketing Professor Akshay Rao told KARE 11. He says consumer confidence is up, there's a new team at the top of the corporate pyramid, and there is the looming possibility that the founder of Best Buy may make a bid on the company.

Plus, the retailer is trying to fight the internet. "So now Best Buy is faced with the Amazons of the world that if they're not careful could do them serious damage unless they evolve. They've got to catch up with the consumer behavior that has evolved and remember, it wasn't that long ago that Best Buy knew they're customers better than Circuit City, and essentially caused the demise of Circuit City," the professor explained.

Joly knows it's a pivotal time, especially following the dismal 3rd quarter. "The results we are reporting today only strengthen our sense of urgency and purpose," he wrote.

Rao says Best Buy and it's yellow tag are a big part of Minnesota's fabric and numbers are on his side of the argument. The company says there are 5,025 employees in the corporate office in Richfield, 2,126 employees in 15 big-box stores across the state, and 131 workers at Minnesota's 15 Best Buy Mobile sites.

Rao says the corporation, along with other Fortune 500 companies, help attract the brightest business students to the U of M. "They're a very essential element, they're a very visible brand name, they employ a lot of people, they provide a lot of value to the community not just in terms of goods and services, but in terms of philanthropy," he concluded.

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