Best Buy going out of business? Will It Happen?

by Dori Tery on March 15, 2013

Is Best Buy Going Out of Business About To Happen?

Many think and continue to say if Best Buy is heading in direction of chapter 7? In August 2012, Best Buy released an urgent announcement that the company was suspending its recent restructuring plan to buy back its own shares from public, leaving many of us wondering if Best Buy about going out of business may be happened very soon. Although, Best Buy has spent more than $6.4 billion dollars to buy the company stocks from public in the past 4 years, the company’s earnings per share still went down to $0.20 per share, at a time when most of us expected the company should able to earn at least $0.31 per share.

Besides, the revenue report released by Best Buy recently was under what Wall Street investors had estimated. These Wall Street investors have put down the expectation that the company revenue should be at $10.61 billion, but the actual revenue was achieved only at $10.55 billion. This converts to a loss of 3 percent for that year. Same to Best Buy retail store sales fell 3.3 percent over the same time a year before, and the company operating margin was reduced to half what it has achieved the year before. But Best buy still expects to have free cash around $1.35 billion in the flow this year. The company is confident that is huge adequate to prevent them from stropping them from growing as well as declaring the Best Buy going out of business.

Best Buy going out of business rumors was forewarned when the corporate has shut down a few of their big retail stores throughout the year 2011 and the early part of 2012. This shut down has caused more than 500 people losing their day jobs although the company claimed that the result of reduced payroll has brought benefits.

Best Buy Going Out of Business Can Happen if They Continue Running Their Business with Old Way

Best Buy is now struggling to fight back, Nevertheless, with a new retail stores model is introduced in two of its key cities. The new retail stores are setting in Minneapolis, Minnesota, and San Antonio, Texas, will be about 15 percent smaller scale than the used to be Best Buy retail stores. Best Buy is wishing to run these stores with cheaper cost and help them to increase the profit margin. All of these actions are to avoid the company going out of business. The company also have plans to allocate these stores closer to each another than they run them as the large box stores.

best buy going out of businessThe company also puts down some solid plans to redesign their company sales website to try to increase the sales and reduce the chance of Best Buy bankruptcy. The company is struggling to compete with other online competitors like Amazon. Best Buy employees comments that many of the customers are visiting the Best Buy retail stores to window shop and test the products before going to online competitors to make the actual purchase. Most of the customers say that this is often the products are sold at a reduced cost. Many Best Buy investors are concerned that if the company cannot solve this problem soon and it will force Best Buy going out of business soon.

Read more of  What is Bankruptcy now.

Previous post:

Next post: