Jeremy Hobson: The big box electronics store Best Buy may be going private. The store’s founder and largest shareholder, Richard Schulze, is reportedly talking to Wall Street banks about a major restructuring of the company.
Marketplace’s John Dimsdale explains.
John Dimsdale: It’s been a rough year for Best Buy. Sales are off and the chief executive resigned in March after hiding an affair with a subordinate. The company’s stock price has dropped almost 40 percent.
Michael Pacter, a research analyst at Wedbush Securities, says Best Buy can’t compete for Internet shoppers.
Michael Pacter: Any price conscious tech savvy consumer who has a smartphone is able to use Best Buy as a showroom and comparison shop instantly; and when they do comparison shop for big ticket items like televisions, they will always find those TVs are cheaper somewhere else.
Schulze, who owns about 20 percent of Best Buy, isn’t commenting. But news reports say he wants to take the company private in order to drastically downsize stores and streamline the merchandise.
But analyst Pacter is skeptical.
Pacter: It’ll take them ten years to get out of the leases that they have to open new stores — and they don’t have ten years.
Pacter doesn’t hold out much hope for Best Buy’s future.
Pacter: Best Buy is the Blockbuster of this decade.
In Washington, I’m John Dimsdale for Marketplace.