Best Buy is Closing 50 Big Box Stores In 2012, Here is Their Store Strategy (BBY)

After Blockbuster (update), Borders and Sears dumped square footage all over the retail commercial real estate market, now Best Buy is closing 50 big box stores in 2012. Here's the list of stores closing. Going forward, Best Buy plans to roll out more smaller stores ("Best Buy Mobile") and their new "Connected Store" format. I found the details in Best Buy's Q4/FY 2012 earnings release:

"U.S. Store Format Improvements
Best Buy's retail store strategy is to increase points of presence, while decreasing overall square footage, for increased flexibility in a multi-channel environment. The company intends to remodel key stores with a new Connected Store format in fiscal 2013, and to continue to build out the successful Best Buy Mobile small format stores throughout the U.S.
  • Based on results from store pilots conducted in 2010 and 2011, Best Buy will be deploying "at-scale" market tests of its new Connected Store format in the Twin Cities and San Antonio metro areas. The store remodels are expected to be completed before the 2012 holiday season. Connected Stores are remodeled big box stores that focus on connections(1), services and multi-channel experience through a total transformation of both the store and the operating environment.
  • The company expects total big box square footage in these combined test markets to be reduced by almost 20 percent through store downsizing and closures, while points of presence will increase by more than 20 percent.
  • Best Buy expects to open another 100 U.S. Best Buy Mobile small format stores in fiscal 2013 and continues to expect to have a total of 600 to 800 such stores by fiscal 2016 (from 305 today)."

Is MicroCenter Best Buy's direct competition right now? I've been to one in Michigan. Now a look at the chart. $BBY, which is currently trading at $21.85, is down more than half from its peak of $47.13 in 2010. I don't see strength or positive momentum yet on the chart. It's a wait and see. Watch to see how BBY reacts at the downtrend line and near-term support (21.21-22.32).

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