Best Buy Founder and Former CEO Offers $8.8 Billion for the Company

[TheDickWard]

He says that this is a necessary step towards getting the company where it needs to be.

http://business.time.com/2012/08/06/...mpany-private/

[Kobeskillz]

I used to be the biggest Best Buy guy ever. I almost lived there. I was there so often and knew so much that I got a job at their TV department.

With that said. Screw Best Buy. They got worse and worse. Less knowledgeable employees. Their reward program went down hill. Prices went up.

Amazon all the way. I've saved thousands. Never looked back.

[rm082e]

The offer price represents a 36% to 47% premium above the price at which Best Buy was trading on Friday, but even that may not be enough to get the deal done. Schulze will have to get unanimous approval from all members of the board for the deal to go through, and might run into opposition from current interim CEO Mike Mikan, who has sat on Best Buy’s board since 2008. Mikan recently announced a turnaround plan of his own, and probably won’t easily reliquish his leadership role. Schulze wrote in his letter that he had talks with former CEO and COO Brad Anderson and Allen Lenzmeier, who are “interested in rejoining the firm” if Schulze were able to take it private, and that may mean that Mikan is the odd man out.

Also, even with the premium, the board may not think the price is right. Anthony Cukumba, an analyst at BB&T Capital Markets told Bloomberg News he thought a takeover of the company would cost at least $30 a share in order to “persuade long-time investors to sell.”

[Badger3920]

While taking the company private would be helpful insofar as escaping the earnings ratrace and pressures, such that the company could merely work on being profitable instead of earning competitive profits to lure investors, I still see this as a bad investment for this guy. I dont think large brick and mortar stores can compete. The market has shifted and is continuing to shift toward the internet.

I've argued before, and still think, that Bestbuy's best move would be to overhaul their website and make it actually kickass and useable like Amazon's, and then ditch all of their big box stores. Instead of their huge stores, downsize to smallish showrooms that only carry stock on popular items (maybe new release blurays, games etc), and these show rooms would only showcase and stock things that draw people to the store for a demo like TV's.

This would save them a metric shit ton of cash on all their store rent/lease payments and would keep them differentiated from amazon by having a store front for things that people want to see before they buy. They'd also continue to carry "impulse buys" items like a few gadgets and movies/music

They should also change their price-matching policy to something like "Price Match Within $5" or "Price Match Within $10" - so that they'd agree to price match even Amazon, but they could charge $5/$10 more than whatever the matching price against Amazon would be. Depending on the item, if it were a TV - I would want to take my TV home that day and would gladly pay $10 more for that rather than going on Amazon and waiting for it to ship to me. This would also allow them to keep some extra cash to pay for their store fronts

Their current model will only lead them down the path of Circuit City

[HDuser30]

I've argued before, and still think, that Bestbuy's best move would be to overhaul their website and make it actually kickass and useable like Amazon's, and then ditch all of their big box stores. Instead of their huge stores, downsize to smallish showrooms that only carry stock on popular items (maybe new release blurays, games etc), and these show rooms would only showcase and stock things that draw people to the store for a demo like TV's.

I worked on their Web team for over a year and trust me, we've tried many times to convince the big wigs to change the site to be more like Amazon. But they kept saying no and one of their creative directors left the company and guess where he went? That's right Amazon. The top executives in that company are a bunch of arrogant a-holes. I was one of the creative directors on their web team and I've fought many times with the executives on why they should change the site. After a year of fighting, I decided I've had enough and left. I'm now with DELL, which is much better.

[Badger3920]

Congratulations on your new position. The bestbuy website is pretty terrible, it seems we agree on that much

Honestly, I think they're afraid of making the layout easier to use because it would be easier to compare and find information on things (like finding out through user reviews that HDMI cables shouldn't be more than $5 in general, or that their TV's are $200 overpriced etc)

[worstusernameever]

What they really need to do is actually stock the items they advertise. I don't buy much from BB anymore because I literally can't, they never have anything I'm looking for. I usually wind up having to take their ad to Walmart and get a price match. Actually, the BB of today is pretty similar to the way Circuit City used to be in that regard. I guess the main thing CC was good for was keeping BB on their toes, because before CC went under this sort of problem didn't happen at BB.