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Alex Fergusson Architects

Bye bye, Best Buy, bye bye.
Don't cry baby, there'll be a Fire Sale!

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What Happened

Apologies to the UK workforce for this rather crass headline, but couldn't resist it. It seems that the collaboration between Best Buy of the US and Carphone Warehouse of the UK is being unravelled. In the process, the UK branches of Best Buy will close. There are eleven stores and around a thousand workers are affected.

Map of southwest London showing Best BuyWe did mention a few marketing fundamentals that Best Buy appeared to overlook in our earlier article, but it would intrude on public grief to cover this ground again in detail. In summary, the issues centred on location, product mix, location, store size, location and, last, but not least, location. 

In their defence though, it should mentioned that the markets they are selling in have had a pretty torrid time everywhere over the past year or so. There has been

  • a general recession which has hit discretionary gadget purchases disproportionately,
  • a less than euphoric uptake for 3D TV,
  • continued retrenchment of bricks-and-mortar retail in the face of internet sales (about 2% per year, but worse for electricals)
  • repeated delays in Android deliveries affecting tablet sales, and
  • an increase in petrol prices hitting out-of-town stores. (Did we mention location?)

Should You Buy Now?

Looking forwards, it seems likely that the closing down process will be dragged out over quite a long period to maximise revenue from the stock. Perhaps the final days will be just after Christmas as happened with Woolworths.

As ever, in these situations it is important to factor into your new price expectations the fact that you can expect the warranty to be harder to use. All products in the store should be discounted to reflect this straight away. Just as yet, the website shows no obvious signs of change, so perhaps it is best to wait a day or two.

So - until there are some real discounts - Best Not Buy...


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