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Best Buy Making a Comeback

Hubert Joly CEO of Best Buy
Hubert Joly CEO of Best Buy

After two long years of being in the duldrums Best Buy finally posted its best quarterly revenues, boding well for a turnaround which has long been in the making.

Best Buy, along with other “big box” retailers, have been facing fierce competition from the Internet, the place consumers have been turning to more and more for appliances and other electronic gadgetry.

Observers and investors were wondering whether the shift in venues was a permanent change. The fact that Best Buy seems to be making a comeback implies that retailers still have some clout with consumers.

The improvement can be attributed to the work of Chief Executive Officer Hubert Joly, who took over leadership at Best Buy one year ago. Known a s corporate turnaround specialist, Joly was brought aboard to specifically address Best Buys many problems.

High on the list of trouble spots were BB’s high prices. At the center of the issue is the phenomenon known as “show rooming” where potential buyers come into a store to view the product, but buy it somewhere else at a considerably lower price. Internet sites such as Amazon, which have very little overhead, can easily sell the same items for less money.

Joly instituted a price matching program, promising to match the prices of 19 on-line competitors and also local stores. Best Buy will also rebate money if the store lowers its price within 15 days of purchase. Joly wants to “eliminate price as an obstacle to buying.”

But he is not trying to undercut the competition either.

“We love the traffic on our site, in our stores, and we don’t want to lose a customer because of price. But we don’t feel that we need to be lower than (the) competition,” he said. “We just don’t want to be beat.”

Macy’s Is Gearing Up For Thanksgiving Sales

Macy’s Inc. (M), like most retail outlets, is gearing up for the thanksgiving holiday season. They are hiring extra help and planning to be open extra hours. In addition, there are 10-15% discounts to attract customers on this amazingly competitive shopping season. All of the retail stores, such as JCPenney, Target and Wal-Mart are all competing for this holiday business. They all know that consumers will spend less this year because of economic constraints and every store wants to get as much of the sales that they can.

Macys Inc. (M) operates department stores under the names Macy’s and Bloomingdales and also internet stores under those names. The Macy’s stores sell clothes, home furnishings, cosmetics and other consumer goods. Bloomingdales adds jewelry, handbags and intimate apparel into the product mix. Macy’s owns 850 department stores located in 45 states in the U. S. The original Macy’s was founded in 1820 so the chain has 190 years of experience.

The company seems to be managed fairly well with a return on assets of 6.53% and a return on equity of 21.93%.

Some of the directors and staff are: Janine Durborow, Wilberte Paul, Stephen F. Bollenbach, and Karen M. Hoguet.