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Entries in Best Buy (26)

Friday
Oct042013

Price War: Walmart Is Latest to Drop Price of iPhone 5c

Apple, Inc.(NEW YORK) -- The iPhone 5c price drop war is on. After Best Buy announced Thursday that it was planning to offer Apple's iPhone 5c for $50 with a two-year contract -- nearly half of Apple's $99 price -- Walmart has announced that it will offer the phone for $45.

"This is what we do -- low prices is what we do," Sarah Spencer McKinney, director of corporate communications for Walmart, told ABC News. "As a price leader, we are always looking for ways to surprise our customers with low prices and disrupt the competition."

McKinney told ABC News to expect the price to remain at $45 throughout the holiday season. The deal began on Friday and is only available to customers in stores who sign a two-year contract on the handset.

While both Walmart and Best Buy maintain that this is just a deal to drive attention to the iPhone 5c, the price drop comes as the higher-end iPhone 5s has been sold out at various stores. The 5s has a faster processor, better camera and a new fingerprint reader embedded in the home button.

Apple declined to comment on the Best Buy or Walmart deals or on the specific sales numbers of the iPhone 5c.

"I think the 5c has gotten overshadowed and, given that the 5s isn't available everywhere, this is a way to get people excited about the latest and greatest Apple product," Stephen Baker, vice president of industry analysis at NPD, told ABC News.

Copyright 2013 ABC News Radio

Wednesday
Mar062013

More Americans Telecommuting; Best Buy Joins Yahoo in Ending Practice

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- More and more Americans are working from home, according to new census numbers -- even though two high-profile companies are banning the practice, saying they want their employees to actually show up at work.

Ditching the commute is a workplace perk that 13.4 million Americans enjoyed at least one day a week in 2010.  The census bureau says that's 9.4 percent of the workforce, up from 7 percent in 1997.  

Amine Khechfe, co-founder of Silicon Valley software company Endicia, says it helps productivity.

"They're saving maybe two to three hours of commute time," Khechfe says.  

But it's the subject of a new debate: struggling companies Yahoo and Best Buy are changing their rules, saying all employees now must physically come to work.

Copyright 2013 ABC News Radio

Thursday
Jan242013

Amy Poehler Will Star in Best Buy's Super Bowl Commercial

Charles Eshelman/FilmMagic(NEW YORK) -- Fresh off her successful turn as a co-host of the Golden Globes alongside Tina Fey, Amy Poehler will appear before a much larger audience on Super Bowl Sunday.

Best Buy has cast Poehler for its Super Bowl commercial, which will air during the first quarter of CBS' broadcast of the big game on Feb. 3.  The electronic retailer did not disclose the premise of the ad.

Details regarding the Super Bowl commercial lineup have been announced throughout the week.  Footwear company Skechers will air two commercials, one of which will feature Super Bowl legend Joe Montana.  And car manufacturer Hyundai says it will air four new ads.

Mercedes-Benz has debuted a teaser for its ad, whose title says it all: "Kate Upton Washes the All-New Mercedes-Benz CLA in Slow Motion."

Earlier this week, Coca-Cola posted online a new Super Bowl ad, the ending of which will be selected by voters and air during the game itself.

Copyright 2013 ABC News Radio

Sunday
Nov182012

Black Friday: Retailers, Shoppers Preparing for Big Day

ABC News(NEW YORK) -- Retailers are preparing for a stampede of shoppers on Black Friday, some of whom have already begun camping outside of stores, eager to get the best deals first.

Nearly one in four Americans, 86 million total, hit the stores on Black Friday last year, according to the National Retail Federation.

At one retailer, ABC News witnessed a mock Black Friday scenario, where a steady line of people banged their shopping carts through the door.

There’s good reason for the training. Some shoppers in Wisconsin are already camped out, ready to be the first people through the door when the Black Friday sales begin.

“Our time is almost getting paid back just by the savings,” one shopper said.

But not everyone is cheerful about the big day. Employees of some big box stores are unhappy their stores are opening on a Thursday for shopping, causing them to miss spending Thanksgiving with their families.

“We’re just demanding respect,” said Rosetta Brown, a Wal-Mart employee.

Target announced on Monday that it is opening some stores on Thanksgiving at 9 p.m. for its Black Friday sale, which in the past began the day after Thanksgiving.

Walmart will be opening its doors at 8 p.m. Sears will also open at 8 p.m. on Thanksgiving, moved up from 4 a.m. on Black Friday last year. Kmart will be open Thanksgiving Day 6 a.m. to 4 p.m., then it will close and reopen 8 p.m. to 3 a.m. Macy’s, Kohl’s and Best Buy open at midnight.

Copyright 2012 ABC News Radio

Friday
Oct122012

Report: Best Buy to Match Prices of Online Competitors

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- Another big retailer is said to be playing hardball with Amazon.

The Wall Street Journal reports Best Buy is planning to match the price of its online competitors during the holiday shopping season and offer free home delivery on items that are sold out in stores.

Walmart has already stopped selling Amazon's Kindle e-reader and rolled out plans for a same-day delivery service for online shoppers in some big metropolitan markets. 

The Journal says Best Buy is attempting to fight back against "showrooming" -- which occurs when consumers walk into stores and then shop online for a cheaper price.

"Best Buy is still working out the details of its Internet price matching program, which might exclude some items," the newspaper says.

Toys 'R Us has been taking a different strategy: expanding its large range of exclusive products and adding more pop-up stores for the holidays.

Copyright 2012 ABC News Radio

Sunday
Sep092012

Best Buy CEO Aims to Revitalize Stores Through Employee Training

KAREN BLEIER/AFP/Getty Images(NEW YORK) – Best Buy’s new CEO Hubert Joly plans to devote more resources to training employees after the electronics retailer experienced a decline in sales due to an uneven performance among stores, Bloomberg News reports.

Joly, who succeeded interim CEO Mike Mikan this month, said late last week that the goal of the training is to make store employees “an undisputed point of reference” for customers, according to Bloomberg.

The 53-year-old new CEO is tasked with reviving sales at Best Buy, since the retailer is approaching its first annual revenue decline, as competitors such as Amazon.com take customers away. Best Buy’s same-store sales dropped 3.2 percent in the second quarter, Bloomberg says.

Copyright 2012 ABC News Radio

Thursday
Aug232012

Best Buy (BBY) Defends Estimated $32 Million Pay Package for New CEO

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- Best Buy (BBY) is giving new CEO Hubert Joly a compensation package valued up to $32 million for three years, including a guarantee of more than $6 million even before he starts work if the deal falls apart.

A native of France, Joly has been guaranteed $6.25 million if he can't obtain a visa to work in the United States by the end of September and the deal falls apart, the Wall Street Journal reported. He will have an annual base salary of $1.175 million, plus additional cash and stock awards.

The company said Monday it had hired Joly, the former CEO of hospitality group Carlson, to replace interim CEO Mike Mikan after former chief executive Brian Dunn resigned because of an inappropriate relationship with an employee.

Best Buy Tuesday announced a near-90-percent drop in profit for the second quarter to $33 million. The company has had struggling sales as customers shop for lower-priced goods online.

Maggie Habashy, a spokeswoman for Best Buy, said in a statement that two-thirds of the amount cited by the Journal "is a one-time payment intended solely to make Mr. Joly whole for the outstanding compensation he left behind in departing Carlson, his previous employer."

A spokeswoman for Carlson, which is a privately held company based in Minnetonka, Minn., declined to comment about his pay.

Even though Joly was already working in Minnesota, he needs to obtain a new visa because he's changing employers.

Habashy said "the amount that can accurately be described as compensation going forward is weighted approximately 90 percent to variable incentives, the value of which will depend on how operational goals are met and movements in share price."

"The cash compensation is squarely in the mid-range for a CEO of a company the size of Best Buy," Habashy said in the statement. "This package was developed in consultation with leading search and compensation firms and is in line with best practice for Fortune 500 companies."

Aaron Boyd, research director with executive compensation research firm Equilar, said Joly's annual target pay figures appear to align with what other top CEOs at the largest companies receive.

The median pay for CEOs of the S&P 500 was at $9.6 million per year, Boyd said. Joly's annual pay will be at about $12 million per year.

"Beyond the annual pay, he'll likely get the most amount of value from make-whole awards meant to compensate him for leaving Carlson and the value he gave up by leaving there," Boyd said.

Best Buy is giving him a grant valued at $20 million, Boyd said.

"It is not unusual for a company to give out awards to make up for what had to be given up," he said.

Recent examples include Yahoo's hiring of Marissa Mayer from Google in July and J.C. Penney recruiting CEO Ron Johnson away from Apple Inc. in November.

Mayer has an annual base salary of $1 million a year plus other awards, including $12 million in Yahoo stock. She could earn up to $60 million if she stays with the company for five years.

J.C. Penney paid Johnson $53 million last year.

Copyright 2012 ABC News Radio

Tuesday
Aug212012

Best Buy Reports Near-90 Percent Profit Drop

KAREN BLEIER/AFP/Getty Image(NEW YORK) -- Best Buy Co. on Tuesday reported a nearly 90 percent drop in profit for the second quarter, owing to tight margins and poor sales.

Shares were down more than 6 percent to about $17 Tuesday morning at the end of the company’s conference call with stock analysts, which was shorter than usual.

The Minneapolis-based company reported a profit of $33 million in the second quarter from $260 million a year ago in the same period -- a drop of about 87 percent.

The company said little about its new CEO, Hubert Joly, who is expected to take the reins in September, nor the takeover offer from founder Richard Schulze, except that the offer still stands.

R.J. Hottovy, senior retail analyst with investment firm Morningstar, said he had expected the steep drop in profits, much of which came from a squeeze in company margins.

A few factors contributed to the shortfall, Hottovy said.  In the smartphone category, companies like Apple and Samsung control a large part of retailers’ sales.  In addition, Hottovy said consumers are buying smaller televisions, which also have lower profit margins.

He said company sales numbers came in slightly better than anticipated in the United States, some of which was because of stronger promotional strategies to drive notebook sales. Company sales were $10.55 billion for the quarter, a drop of 3 percent.

“I think today’s results are the latest sign the company is in transition, not only internally but externally,” Hottovy said.

“There was not a lot of detail with turnaround plans, which is a little bit unnerving,” he continued. “But part of it is expected with a new CEO.”

Copyright 2012 ABC News Radio

Monday
Aug202012

Best Buy Names Hubert Joly New CEO

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- Best Buy has appointed a new CEO, Hubert Joly, to lead the beleaguered electronics retailer.

Interim CEO Mike Mikan, who has led Best Buy since former chief executive Brian Dunn resigned following an inappropriate relationship with a female employee, will continue to serve on the board.

On Sunday night, Joly resigned as CEO of the hotel and restaurant company, Carlson, the parent of Radisson and Country Inns and Suites, and T.G.I. Friday’s restaurants, based in Minneapolis.

Joly will have his work cut out for him in trying to turn around Best Buy, which is facing increasing competition from online retailers and a takeover offer from founder Richard Schulze.

Jeff Macke, co-host of Yahoo Finance’s Breakout, said regardless of the new appointment, Best Buy’s turnaround is unlikely.

“Best Buy has got a lot of problems,” Macke said on ABC News Now. Electronics customers have been turning to a lower-priced online competitor, Amazon.

But R.J. Hottovy, a senior retail analyst with investment firm, Morningstar, said Joly’s turnaround experience with service and technology companies, including Vivendi’s video game business unit, French-based Electronic Data Systems and consulting firm McKinsey & Co., make him an “appropriate choice.”

“We believe Joly’s experience with service and technology companies will be an asset in improving Best Buy’s in-store service offering and making it a more competitive online retailer,”  Hottovy wrote in a note to investors. “Still, it remains unclear what decisions Joly will make regarding Best Buy’s retail square footage, where we’ve long since believed a dramatic reduction was necessary to narrow the pricing parity gap with players like Amazon and generate positive economic returns.”

Best Buy will report its second-quarter earnings Tuesday morning.

In mid-afternoon trading, shares of the company were trading around $18.75, down 7.5 percent.

video platform video management video solutions video player

Copyright 2012 ABC News Radio

Monday
Aug062012

Best Buy Founder Faces Obstacles in Taking Company Private

KAREN BLEIER/AFP/Getty Images(NEW YORK) -- Best Buy founder Richard Schulze has offered to buy his retail company for $8.8 billion but faces an uphill battle with the company’s board in pitching his deal.

“There is no question that now is the moment of truth for Best Buy and that immediate and substantial changes are needed for the company to return to its market-leading ways,” Schulze, 71, wrote in a public letter addressed to Best Buy’s board on Monday.  “After assessing all of my options, it is my strong belief that Best Buy’s best chance for renewed success is to implement with urgency the necessary changes as a private company.”

Schulze offered $24 to $26 per share to shareholders.  Shares of the company traded around $19.79 late Monday morning, up almost 12 percent.

Best Buy, in a statement about what the company described as “the unsolicited, highly conditional indication of interest” from Schulze,  said that its board of directors “will evaluate this proposal carefully and will, as always, pursue the best course for its shareholders.”

Schulze said in a statement that he made “repeated requests to the board for several weeks to provide me with due diligence information and the consent to form a group required under Minnesota law, both of which will be necessary to reach a definitive agreement.”

“While I preferred a private negotiation, time is of the essence.  I am deeply concerned that further delay and indecision will cause additional loss of both value and talented leaders who are now uncertain of the company’s future,” Schulze said.

Schulze resigned from Best Buy’s board in June after the company discovered he failed to inform the board that former CEO Brian Dunn had an inappropriate relationship with a female employee.

In resigning from the board, analysts said Schulze was positioning himself to move to take over the company as a private firm.  He controls 20.1 percent of Best Buy shares, and is the company’s largest shareholder.

R.J. Hottovy, senior retail analyst with investment firm Morningstar, said Schulze faces at least three obstacles before the proposal is even considered.

First,  Schulze must have the approval of all board members before signing deals with private equity partners for the takeover.  Hottovy said Schulze may face opposition from interim CEO Mike Mikan, a Best Buy director since April 2008, who has expressed interest in a permanent CEO position and had his own turnaround plans in the company’s last conference call in May.

“Without the meeting of minds between him and Schulze, it could be difficult to get all shareholders on board,” Hottovy said.

Second, Schulze will have to detail what is different in his turnaround plans.  And the third obstacle is that Schulze’s offer price may not be high enough.

“There are probably some current shareholders who believe business can be turned around and want a higher offer than what Schulze is offering to get a deal done,” Hottovy said.

Copyright 2012 ABC News Radio







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