Best Buy is a "Big Box Zombie" on the cover of this week's Bloomberg Businessweek [IMAGE]
After eating brains, this zombie heads to Best Buy for his electronics needs.
Zombies like to pub crawl, eat brains... and shop at Best Buy?
That's apparently the case, according to the cover of this week's Bloomberg Businessweek, which shows the undead emerging from a Best Buy store with a box of electronics (or maybe Geek Squad brains) in tow. The headline? "Big Box Zombie."
Here's the full cover image (read the cover story, "The Battle for Best Buy, the Incredible Shrinking Big Box," here):
As the title suggests, the story is about Best Buy founder Richard Schulze's effort to raise capital and takeover the company before it's too late. Here's an excerpt:
Best Buy is in trouble. In March it posted a $1.7 billion quarterly loss. Same-store sales comparisons have been declining, and a Bloomberg analysis suggests revenue will fall this year. Wall Street, at least as far as Best Buy's stock price is concerned, does not seem excited by the prospect of Schulze's takeover. Shares have languished well below the $24 to $26 per share Schulze offered on Aug. 6 to take Best Buy private. Its current management hasn't shown much enthusiasm for his return either, though new CEO Hubert Joly recently made his public-relations handlers cringe by telling Bloomberg News, "In many ways, all of us work for Dick Schulze and this great company."...
[But] Best Buy has time to right itself. The company still has $50 billion in revenue, a dominant share of its market, and a strong balance sheet. Showrooming isn't as pervasive--yet--as it's portrayed in media coverage. A recent study by Stevenson Co.'s TraQline Report shows that people who shop at a Best Buy but then buy online elsewhere account for only 5.4 percent of the company's shoppers. Still, the company has given its blue shirts the power to match some Amazon prices during the holidays, partly to offset showrooming.
Online retailers could lose some of their pricing edge as more states force them to levy sales taxes. Sony and other manufacturers have begun to demand that Amazon set some prices no lower than at stores. Where price gaps narrow, in-store shoppers may be more inclined to collect their stuff immediately rather than wait for UPS (UPS). "It looks like there's a big opportunity to get consumers outside the store inside the store," says Guy Rosen, CEO of data firm Onavo.
In other words, Best Buy may currently be zombified, but state-level sales taxes on online goods could be the antidote that brings the company back to life.
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