Académique Documents
Professionnel Documents
Culture Documents
Type Public
NYSE: BBY
Traded as
S&P 500 Component
Industry Retail
Website www.bestbuy.com
Contents
[hide]
1History
o 1.1Early history
o 1.22000s
o 1.32010s
2Corporate affairs
o 2.1Business operations
o 2.2House brands
3Criticism
o 3.1Warranty
o 3.2Pricing
o 3.3Analog televisions
o 3.4Environmental issues
4References
5Further reading
6External links
History[edit]
Early history[edit]
In August 1966, Richard M. Schulze and a business partner opened Sound of Music, an
electronics store specializing in high fidelitystereos in Saint Paul,
Minnesota.[11][12][13][14][15][16][17][18][19][20] Schulze financed the opening of his first store with his personal
savings and a second mortgage he took out on his family’s home.[19][21] In 1967, Sound of Music
acquired Kencraft Hi-Fi Company and Bergo Company.[21] Sound of Music earned $1 million in
revenue and made about $58,000 in profits in its first year.[19] In 1969, Schulze bought out his
business partner. Sound of Music had three stores and became a publicly held company listed
on the NASDAQexchange.[19][22]
Sound of Music operated nine stores throughout Minnesota by 1978.[23] In 1981, the Roseville,
Minnesota, Sound of Music location, at the time the largest and most profitable Sound of Music
store, was hit by a tornado.[19] The store’s roof was sheared off and showroom destroyed, but the
storeroom was left intact.[19][24] In response, Schulze decided to have a “Tornado Sale” of
damaged and excess stock in the damaged store’s parking lot.[19] He poured the remainder of his
marketing budget into advertising the sale, promising “best buys” on everything.[24] Sound of
Music made more money during the four-day sale than it did in a typical month.[20]
In 1983, with seven stores and $10 million in annual sales, Sound of Music was renamed Best
Buy Company, Inc.[23][24] The company also expanded its product offerings to include home
appliances and VCRs, in an attempt to expand beyond its then-core customer base of 15-to-18-
year-old males.[24] Later that year Best Buy opened its first superstore in Burnsville,
Minnesota.[24] The Burnsville location featured a high-volume, low price business model, which
was borrowed partially from Schulze’s successful Tornado Sale in 1981.[19][24] In its first year, the
Burnsville store out-performed all other Best Buy stores combined.[20][21]
Best Buy debuted on the New York Stock Exchange in 1987.[25][26] In 1989, the company
introduced a new store concept dubbed “Concept II.”[21][25] Concept II replaced dimly lit industrial-
style stores with brighter and more fashionably fixtured stores.[21] Stores also began placing all
stock on the sales floor rather than in a stock room, had fewer salespersons and provided more
self-help product information for its customers.[25][26] Best Buy also did away with commissioned
salespeople.[19][25] The commission-free sales environment “created a more relaxed shopping
environment free of the high-pressure sales tactics used in other stores,” but was unpopular with
salespersons and suppliers.[25] Some suppliers, such as Maytag, Whirlpool and Sony, were upset
that salespeople would no longer be pushing their products and stopped selling their wares in
Best Buy stores.[19][20] The suppliers returned after Best Buy’s sales and revenue grew following
the roll-out of Concept II.[24]
In 1992, the company achieved $1 billion in annual revenues.[26] In 1995, Best Buy debuted
“Concept III” stores, which were larger than its previous stores.[26][27] The Concept III stores
included expanded product offerings, interactive touchscreen kiosks that displayed product
information for both customers and employees, and demonstration areas for products such
as surround sound stereo systems and videogames.[27][28]
Best Buy launched its “Concept IV” stores with its expansion into New England in
1998.[26][29] Concept IV stores included an open layout with products organized by category, cash
registers located throughout the store, and slightly smaller stores than Concept III stores.[30] The
stores also had large areas for demonstrating home theater systems and computer software.[26][31]
In 1999, Best Buy was added to Standard & Poor's S&P 500.[26]
2000s[edit]
Former Best Buy Store located in Shanghai, China, now closed and merged with Five Star.
This Best Buy logo has appeared at Mall of America since 2008.
In April 2010, Best Buy opened its first United Kingdom-based Best Buy-branded store
in Thurrock.[66] The company eventually opened 11 Best Buy stores in the United Kingdom.[67] The
company closed all UK-based Best Buy stores in November 2011.[67] That same month Best Buy
purchased The Carphone Warehouse’s share of Best Buy Mobile for $1.3 billion.[67] Best Buy and
The Carphone Warehouse maintained their Best Buy Europe joint venture, which at the time
operated 2,500 mobile phone stores throughout Europe.[67]
The company closed all of its Best Buy-branded stores in China by February 2011, when it
merged Best Buy China’s operations with Jiangsu Five Star, which had become a wholly owned
subsidiary of Best Buy in 2009.[3][68] In December 2011, Best Buy purchased mindSHIFT
Technologies, a company that provided IT support for small and medium-sized businesses, for
$167 million.[69]
In 2012, in response to overall revenue decline, Best Buy announced plans to undergo a
"transformation strategy". Stores began to adopt a redesigned "Connected Store" format,
providing the Geek Squad with a centralized service desk and implementing a "store-within-a-
store" concept for Pacific Kitchen & Bath and Magnolia Design Center.[70]
In April 2012, Brian Dunn resigned as Best Buy’s CEO during an internal company investigation
into allegations of personal misconduct stemming from an inappropriate relationship with a
female Best Buy employee.[71] Best Buy named Director George L. Mikan III interim CEO
following Dunn’s resignation.[71] The internal investigation was released in May 2012 and alleged
that Best Buy founder and chairman Richard Schulze knew of Dunn’s inappropriate relationship
and failed to notify the Best Buy board.[71] Schulze subsequently resigned his chairmanship of the
company.[71] Best Buy Director Hatim Tyabji replaced Schulze as Best Buy chairman.[71]
Hubert Joly replaced Mikan as Best Buy CEO in September 2012.[72] Joly had previously served
as CEO of Carlson, a hospitality conglomerate, since 2008.[72] He led initiatives such as price
matching, speeding up delivery times for online purchases, establishing "store within a store"
sections for major brands such as Apple, Google, Microsoft and Samsung, and giving more
product training to employees.[73]
In April 2013, Best Buy exited the European consumer electronics market when it sold its 50%
stake in Carphone Warehouse back to the UK-based mobile phone retailer.[74][75] The sale was
worth approximately $775 million.[74][75]
An increasing trend towards online shopping began to erode revenues and profits in the 2010s. A
4% dip in sales for the June 30, 2014 quarter, marked the tenth quarter in a row where Best
Buy's sales had declined. The company, in announcing the result, said it was focusing more on
digital-media in its marketing, moving away from newspaper, magazine, and television
advertising.[76]
On March 28, 2015, Best Buy announced the shutdown of the Future Shop chain in Canada; 65
of its 131 former locations were converted into Best Buy locations, while the rest (primarily those
in close proximity to an existing Best Buy) were closed permanently.[77]
On March 1, 2018, the company announced that it would shut down its 250 standalone Best Buy
Mobile stores in the United States by the end of May, due to low revenue.[78]
Corporate affairs[edit]
Business operations[edit]
The Best Buy Mobile located in the Brass Mill Center, Waterbury, Connecticut.
Map of Best Buy stores in the Continental U.S and Southern Canada, as of August 2011
Salesman demonstrating the Apple iPad 2 (June 2011)
Dynex – Discount electronic and computer equipment such as HDTVs, Blu-ray players,
storage media, data and power cables, webcams, and office supplies.
RocketFish – Cables primarily used with home-theater installation and setup as well as on
computer and gaming accessories. RocketFish Mobile includes phone cases, gel skins, clips
and chargers for cell phones, GPS, and other exclusive high-end products.
Insignia – Electronic equipment such as HDTVs, tablets, home-theater systems, and digital
imaging devices.
Modal – Used for style-oriented mobile accessories, including cases, cables, and Bluetooth
speakers.
Platinum – Highest-quality in-house brand for the company, producing many products, such
as cables, cell phone accessories, tablet accessories, and digital imaging equipment.
Init – Storage products such as media storage, equipment bags, totes and furniture for home
theaters.
Pacific Sales – High-end appliance selection inside select Best Buy stores.
Magnolia Home Theater – High-end home theater selection for both audio and visual
equipment, including 4K, 3D, and large televisions, projectors, receivers, and speakers.
Magnolia Home Theater is found in select Best Buy locations. Magnolia Home Theater also
has a group called the Magnolia Design Center, where custom home theater setups can be
designed and installed.
Criticism[edit]
Warranty[edit]
In 2000, two Florida consumers brought a lawsuit against the company, alleging that it engaged
in fraudulent business practices related to the sale of extended warranties (or, more
accurately, service plans). The suit claimed that store employees had misrepresented the
manufacturer's warranty in order to sell its own Product Service/Replacement Plan and that Best
Buy had "entered into a corporate-wide scheme to institute high-pressure sales techniques
involving the extended warranties" and that the company used "artificial barriers to discourage
consumers who purchased the 'complete extended warranties' from making legitimate
claims."[82] The company ultimately settled for $200,000 but admitted no wrongdoing.[83]
In 2014, Best Buy settled for $4.55 million in a class action lawsuit filed against them in April
2010 by consumers who claimed Best Buy was making unsolicited phone calls in contravention
of the Telephone Consumer Protection Act.[84]
Pricing[edit]
In the second quarter of 2007, Connecticut Attorney General Richard Blumenthal ordered an
investigation into the company's use of an in-store website alleged to have misled customers on
item sales prices.[85] In December 2007, the Los Angeles Times reported on the same issue, in
which some customers claimed they thought they were surfing the Internet version of
bestbuy.com at an in-store kiosk only to learn that the site reflected in-store prices only. In
response, company spokesperson Sue Busch indicated the in-store kiosks were not intended for
price-match purposes and rather were a means to navigate in-store availability. Since the initial
investigation, a banner was placed on the in-store site to make its customers more aware of the
difference.[86]
Similar pricing errors occurred in July 2009, when the Palm Pre multimedia smartphone was
mistakenly sold for $99.99 (versus the retail price of $199.99), and Best Buy honored some of
the sales.[citation needed] Best Buy regularly exercises the right to cancel orders associated with errors
on its website.[citation needed]
Analog televisions[edit]
In April 2008, the U.S. Federal Communications Commission (FCC) fined the company $280,000
for not alerting customers that the analog televisions it sold would not receive over-the-air
stations after the digital transition on June 12, 2009.[87] The company challenged this ruling in
May 2008 by the FCC saying it was and is in compliance with current FCC regulations pertaining
to the digital transition.[88]
Environmental issues[edit]
It was one of several large companies named by Greenpeace in 2007 for purchasing raw
materials or manufactured products derived thereof from logging companies that, in the opinion
of Greenpeace, contribute to unethical deforestation of taiga in Canada.[89]
Since that time, however, the company launched what it calls Greener Together to increase the
energy efficiency of its products as well as reduce consumer waste through more recyclable
packaging and proper disposal of certain electronic components such as rechargeable batteries,
and empty ink cartridges.[90]
As a way to improve its image and past environmental issues, the company introduced a
recycling program in 2009 that has since collected nearly half-a-billion pounds of consumer
electronics and e-waste and is available at all their stores for a nominal fee. These items are then
handed over to certified recyclers in the U.S. for proper recycling. The company's goal is to
collect one billion pounds of recycling.[91]
It also has been named to the U.S. Environmental Protection Agency top-50 list of the largest
green-power purchasers. In 2011, the company purchased nearly 119 million kilowatt-hours
(kWh) of green power – electricity generated from renewable resources, such as wind, solar,
geothermal, biogas, biomass and low-impact hydropower.[92]
References[edit]
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have left the shop, writes Lauren Foster". Financial Times.
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Business Services". TWICE.
51. Jump up^ Desiree J. Hanford (28 March 2007). "FedEx Kinko's Makes Changes To Improve Rev,
Package Volume". Of DOW JONES NEWSWIRES.
52. Jump up^ "Best Buy ends sales of analog TVs". NBC News. Retrieved 21 January 2013.
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54. Jump up^ Nicole Maestri (4 March 2008). "Office Depot introducing new tech support service".
55. Jump up^ Antone Gonsalves. "Best Buy To Recommend Blu-ray Hi-Def Video". Information
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56. Jump up^ Ben Cooper; Amy Shields (18 July 2008). "Best Buy closes in on first stores as UK
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58. Jump up^ ASHLEY M. HEHER (27 July 2008). "Best Buy to open in-store music centers". AP
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59. Jump up^ Scott Campbell. "Best Buy Begins Sales Of Apple's 3G iPhone". CRN. Retrieved 21
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60. Jump up^ YINKA ADEGOKE. "Best Buy to buy Napster for $121 million". Reuters. Retrieved 21
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68. Jump up^ "Best Buy closes China outlets, poor grasp of local market blamed". Xinhua News
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69. Jump up^ Josh Gingold. "Best Buy boldly leaping into managed IT services for small business".
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70. Jump up^ Reisinger, Don (March 24, 2011). "Best Buy Revenue, Earnings Slip in 4th Quarter –
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Electronics Retailer Took Its Biggest Hit in Entertainment Hardware and Software". CNET.
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76. Jump up^ "Best Buy looks to new products to push sales". Minneapolis News.Net. 26 August
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77. Jump up^ "Future Shop shutters Canadian stores, will re-brand as Best Buy". The Globe and
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78. Jump up^ "Best Buy is closing all 250 of its mobile stores in the US". The Verge. Retrieved 2018-
03-01.
79. Jump up^ Best Buy. Encyclopedia of Business in Today's World, Volume 1. Retrieved 21
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80. Jump up^ THOMAS LEE. "Best Buy ends flexible work program for its corporate employees".
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81. Jump up^ HUBERT JOLY. "Best Buy CEO on leadership: A comment I made was misconstrued".
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82. Jump up^ John H. Beisner and Jessian Davidson Miller (September 2001). "They're Making a
Federal Case out of It ... In State Court". Center for Legal Policy at the Manhattan Institute for
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83. Jump up^ "UPDATE 2-Best Buy settles class-action bias lawsuit". Reuters. June 17, 2011.
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84. Jump up^ "Best Buy agrees to $4.55 million settlement in TCPA class action". Legal Newsline.
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86. Jump up^ Lazarus, David (December 23, 2007). "Best Buy Kiosks Not Connected to
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87. Jump up^ Puzzanghera, Jim (April 11, 2008). "Retailers Fined over Digital TV – Consumers Are
Being Deceived About the Upcoming Demise of Analog, the FCC Says". Los Angeles Times.
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88. Jump up^ Ogg, Erica (May 19, 2008). "Best Buy challenges FCC over analog TV sales
penalty". CNET. Retrieved August 6, 2015.
89. Jump up^ Green Peace (August 20, 2007). "Companies Revealed To Be Purchasing Forest
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90. Jump up^ Jennifer Berry (January 26, 2009). "Best Buy To Launch E-cycling at All Locations".
Retrieved January 1, 2013.
91. Jump up^ Aston, Adam (April 24, 2012). "How Best Buy Makes Money Recycling America's
Electronics". GreenBiz. Retrieved August 8, 2012.
92. Jump up^ "Statement: Best Buy Recognized Among Nation's Green Powered Organizations by
U.S. EPA – Best Buy Reduces Carbon Emissions Through Renewable Energy
Alternativaes"(Press release). Best Buy (via Thomson Reuters Investor Relation Services). May
11, 2012. Retrieved August 8, 2012.
Further reading[edit]
Roose, Kevin (September 18, 2017). "Best Buy's Secrets for Thriving in the Amazon Age". The New
York Times. ISSN 0362-4331.
External links[edit]
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