|From: TimF||6/2/2006 1:08:00 PM|
|Couple's Supposedly Destroyed Hard Drive Purchased In Chicag|
A year ago, Henry and Roma Gerbus took their computer to Best Buy in Springfield Township to have its hard drive replaced.
Henry Gerbus said Best Buy assured him the computer's old hard drive -- loaded with personal information -- would be destroyed.
"They said rest assured. They drill holes in it so it's useless," said Gerbus.
A few months ago, Gerbus got a phone call from a man in Chicago.
"He said, 'My name is Ed. I just bought your hard drive for $25 at a flea market in Chicago,'" said Gerbus. "I thought my world was coming down."
Gerbus and his wife had good reason to worry.
A total stranger had access to the couple's personal information, including
Social Security numbers, bank statements and investment records.
Through information listed on the hard drive, the man in Chicago was able to contact the couple.
"He said, 'Do you want me to wipe it clean or send it to you?' I told him to send it to me. I wanted it in my hands," said Gerbus.
Gerbus received the hard drive a few weeks later.
As a precaution, the couple alerted the major credit bureaus to protect their information...
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|From: TimF||12/14/2006 9:17:43 PM|
|Smashing The Clock|
No schedules. No mandatory meetings. Inside Best Buy's radical reshaping of the workplace
One afternoon last year, Chap Achen, who oversees online orders at Best Buy Co. (BBY ), shut down his computer, stood up from his desk, and announced that he was leaving for the day. It was around 2 p.m., and most of Achen's staff were slumped over their keyboards, deep in a post-lunch, LCD-lit trance. "See you tomorrow," said Achen. "I'm going to a matinee."
Under normal circumstances, an early-afternoon departure would have been totally un-Achen. After all, this was a 37-year-old corporate comer whose wife laughs in his face when he utters the words "work-life balance." But at Best Buy's Minneapolis headquarters, similar incidents of strangeness were breaking out all over the ultramodern campus. In employee relations, Steve Hance had suddenly started going hunting on workdays, a Remington 12-gauge in one hand, a Verizon LG (VZ ) in the other. In the retail training department, e-learning specialist Mark Wells was spending his days bombing around the country following rocker Dave Matthews. Single mother Kelly McDevitt, an online promotions manager, started leaving at 2:30 p.m. to pick up her 11-year-old son Calvin from school. Scott Jauman, a Six Sigma black belt, began spending a third of his time at his Northwoods cabin.
At most companies, going AWOL during daylight hours would be grounds for a pink slip. Not at Best Buy. The nation's leading electronics retailer has embarked on a radical--if risky--experiment to transform a culture once known for killer hours and herd-riding bosses. The endeavor, called ROWE, for "results-only work environment," seeks to demolish decades-old business dogma that equates physical presence with productivity. The goal at Best Buy is to judge performance on output instead of hours.
Hence workers pulling into the company's amenity-packed headquarters at 2 p.m. aren't considered late. Nor are those pulling out at 2 p.m. seen as leaving early. There are no schedules. No mandatory meetings. No impression-management hustles. Work is no longer a place where you go, but something you do. It's O.K. to take conference calls while you hunt, collaborate from your lakeside cabin, or log on after dinner so you can spend the afternoon with your kid.
Best Buy did not invent the post-geographic office. Tech companies have been going bedouin for several years. At IBM (IBM ), 40% of the workforce has no official office; at AT&T, a third of managers are untethered. Sun Microsystems Inc. (SUNW ) calculates that it's saved $400 million over six years in real estate costs by allowing nearly half of all employees to work anywhere they want. And this trend seems to have legs. A recent Boston Consulting Group study found that 85% of executives expect a big rise in the number of unleashed workers over the next five years. In fact, at many companies the most innovative new product may be the structure of the workplace itself.
But arguably no big business has smashed the clock quite so resolutely as Best Buy. The official policy for this post-face-time, location-agnostic way of working is that people are free to work wherever they want, whenever they want, as long as they get their work done. "This is like TiVo (TIVO ) for your work," says the program's co-founder, Jody Thompson. By the end of 2007, all 4,000 staffers working at corporate will be on ROWE. Starting in February, the new work environment will become an official part of Best Buy's recruiting pitch as well as its orientation for new hires. And the company plans to take its clockless campaign to its stores--a high-stakes challenge that no company has tried before in a retail environment.
Another thing about this experiment: It wasn't imposed from the top down. It began as a covert guerrilla action that spread virally and eventually became a revolution. So secret was the operation that Chief Executive Brad Anderson only learned the details two years after it began transforming his company. Such bottom-up, stealth innovation is exactly the kind of thing Anderson encourages. The Best Buy chief aims to keep innovating even when something is ostensibly working. "ROWE was an idea born and nurtured by a handful of passionate employees," he says. "It wasn't created as the result of some edict."
So bullish are Anderson and his team on the idea that they have formed a subsidiary called CultureRx, set up to help other companies go clockless. CultureRx expects to sign up at least one large client in the coming months.
The CEO may have bought in, but there has been plenty of opposition inside the company. Many execs wondered if the program was simply flextime in a prettier bottle. Others felt that working off-site would lead to longer hours and destroy forever the demarcation between work and personal time. Cynics thought it was all a PR stunt dreamed up by Machiavellian operatives in human resources. And as ROWE infected one department after the other, its supporters ran into old-guard saboteurs, who continue to plot an overthrow and spread warnings of a coming paradise for slackers.
Then again, the new work structure's proponents say it's helping Best Buy overcome challenges. And thanks to early successes, some of the program's harshest critics have become true believers. With gross margins on electronics under pressure, and Wal-Mart Stores Inc. (WMT ) and Target Corp. (TGT ) shouldering into Best Buy territory, the company has been moving into services, including its Geek Squad and "customer centricity" program in which salespeople act as technology counselors. But Best Buy was afflicted by stress, burnout, and high turnover. The hope was that ROWE, by freeing employees to make their own work-life decisions, could boost morale and productivity and keep the service initiative on track.
It seems to be working. Since the program's implementation, average voluntary turnover has fallen drastically, CultureRx says. Meanwhile, Best Buy notes that productivity is up an average 35% in departments that have switched to ROWE. Employee engagement, which measures employee satisfaction and is often a barometer for retention, is way up too, according to the Gallup Organization, which audits corporate cultures.
ROWE may also help the company pay for the customer centricity campaign. The endeavor is hugely expensive because it involves tailoring stores to local markets and training employees to turn customer feedback into new business ideas. By letting people work off-campus, Best Buy figures it can reduce the need for corporate office space, perhaps rent out the empty cubicles to other companies, and plow the millions of dollars in savings into its services initiative.
Phyllis Moen, a University of Minnesota sociology professor who researches work-life issues, is studying the Best Buy experiment in a project sponsored by the National Institutes of Health. She says most companies are stuck in the 1930s when it comes to employees' and managers' relationships to time and work. "Our whole notion of paid work was developed within an assembly line culture," Moen says. "Showing up was work. Best Buy is recognizing that sitting in a chair is no longer working."...
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|From: Neil H||12/15/2009 11:30:11 AM|
|Best Buy Earnings: Shares Slump Despite Bottom-Line Beat|
By Matt Phillips
Profit margin concerns have shares of Best Buy down 6.9%, despite the bottom-line beat delivered by the electronics retailer.
One thing that seems to have gotten the attention of investors is the company’s note that “improved revenue outlook for the fiscal fourth quarter will primarily be driven by categories in the domestic segment with lower gross profit rates such as notebook computers and entry price-point televisions across all screen sizes. As a result, the company anticipates a lower fiscal fourth quarter gross profit rate than previously expected.” Translation?: Customers seem to be trading down and buying lower price items.
J.P. Morgan analysts note that “this fuels concerns on the commoditization of the product cycle and that the bankruptcy of [Circuit City] is not relieving the competitive environment with Walmart and Amazon continuing to push into the space.” In short, Wall Street was hoping that the demise of Circuit City would lead to not only fatter sales but also juicier profits. From the look of it, that doesn’t seem like it’ll happen in the fourth quarter.
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|From: Neil H||3/28/2010 6:22:30 AM|
|Laptop, TV sales help juice Best Buy's 4Q profit|
Higher sales of notebook computers, flat-screen TVs boost Best Buy's 4th-quarter results
Mae Anderson, AP Retail Writer, On Thursday March 25, 2010, 4:12 pm EDT
NEW YORK (AP) -- Even in a weak economy, Americans increasingly feel that gadgets such as smart phones aren't luxuries but necessities.
That shift has helped electronics sales weather the recession better than some other categories and helped Best Buy post a strong fourth-quarter profit Thursday on a steep sales increase fueled by flat-panel TVs, notebook computers and wireless gadgets.
Best Buy's profit rose 37 percent, and its revenue grew 12 percent to $16.55 billion. It also projected a brighter-than-expected 2010.
Even though consumers faced tough challenges in 2009 such as the housing slump, job fears and personal debt, CEO Brian Dunn said on a call with investors, they often cut back elsewhere rather than electronics.
He said unit sales of TVs, notebook computers and cell phones increased enough during the year to offset significant declines in prices for some of the items.
That mirrors the industry. Americans bought 34 percent more notebook computers and 22 percent more flat-panel TVs in 2009 compared with 2008, according to market research firm NPD Group Inc.
"Some of the things we offer no longer fall under the category of discretionary purchases," Dunn said. "These solutions have become such integral elements in peoples lives that they have little or no tolerance for any kind of disruption if things aren't working the way they should."
That's true for Sandy Kaye, 29, who left her job as an event planner and went through a divorce in August. She moved in with her father and was unemployed for six months before starting a temp job, but she never considered giving up her iPhone.
"I use it as a phone, for e-mail, it's my alarm clock, it has my grocery lists on it ... it's my crutch," said the Milwaukee resident. "It's so much a part of my life I'm willing to not buy new clothes or new shoes so I don't have to give up my phone."
Best Buy's profit for the three months ended Feb. 27 rose to $779 million, or $1.82 per share. Analysts polled by Thomson Reuters, on average, predicted a profit of $1.79 per share. Excluding an impairment charge in last year's quarter, profit rose 13 percent.
Higher sales of notebook computers, flat-screen TVs and cell phones were partly offset by lower selling prices. Sales of music and movies, categories where more shoppers are buying online, fell.
Because of tough competition in higher-priced items like flat-screen TVs and laptops, electronics retailers have been pressured to lower their prices and make less profit on them.
The average price of a flat-panel screen fell 26 percent to $660 in 2009 from $894 in 2008, according to NPD Group Inc.
Stephen Baker, vice president of industry analysis at NPD Group, said that although TV prices have declined, that has been partly offset by strong demand, something he expects to last throughout the year, particuarly for larger-screen TVs.
Best Buy has also increased its service offerings -- such as computer setup, car installation, Geek Squad tech services and others -- as well as more higher-margin items such as appliances and cell phones and plans.
The company plans to open 75 to 100 small-format stores, mostly selling mobile devices only. Best Buy offers phones and plans from national carriers AT&T, Sprint, T-Mobile and Verizon, along with other carriers on a regional basis and prepaid phones and plans.
Sales in stores open at least 14 months rose 7 percent during the key holiday quarter. That measure is important for retailers because it measures growth at existing stores rather than from newly opened ones.
Best Buy has gained market share since rival Circuit City liquidated last year, but competition with discounters and online retailers remains tough.
The company said it believes it took a bigger piece of the market for flat-panel TVs, notebook computers, cell phones and digital imaging during the quarter.
For the year, profit rose 35 percent to $1.32 billion, or $3.10 per share. Revenue rose 10 percent to $49.69 billion.
The company says it expects a profit of $3.45 to $3.60 per share in the fiscal year ending in February 2011. That is better than the $3.37 analysts predict.
Best Buy expects revenue of $52 billion to $53 billion, in line with analyst expectations of $52.14 billion.
It expects sales in stores open at least 14 months to rise 1 percent to 3 percent during the year.
Best Buy, based in Minneapolis, expects to open 50 to 55 new large-format Best Buys and 10 to 15 Five Star stores in China.
Shares rose $1.48, or 3.6 percent, to $42.66 Thursday. They're nearing levels not seen since mid-December, when shares peaked at $45.55 then tumbled on worries about thinning profit margins.
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|From: Glenn Petersen||8/6/2012 1:08:08 PM|
|How a Best Buy Takeover Might Work |
By MICHAEL J. DE LA MERCED
New York Times
August 6, 2012, 12:28 pm
Best Buy‘s founder, Richard Schulze, finally confirmed on Monday that he is pursuing a takeover of the electronics retailer, one that might be worth as much as $8.8 billion.
That’s a tall order for any leveraged buyout these days, let alone one for a troubled retailer besieged by Wal-Mart Stores on one hand and Amazon.com on another.
But Mr. Schulze and his advisers at Credit Suisse and the law firm Shearman & Sterling appear willing to give it a shot. Here’s how it might work.
In his letter to Best Buy’s directors, he said that he has had discussions with several “premier private equity firms” with experience in retail deal-making about joining him in his bid.
In total, Mr. Schulze will likely need to raise $2 billion in additional equity financing, to go along with the $1 billion worth of Best Buy shares that he is willing to contribute to a deal. He currently owns about 20 percent of the company.
That means that Mr. Schulze and any group he forms must raise about $7 billion in debt to cover the rest of a leveraged buyout. Given that Best Buy is currently rated Baa2 by Moody’s Investors Service, two levels above junk status, such financing may be relatively expensive to maintain. And as of May 5, the company already had about $1.7 billion worth of debt on its books. It also had close to $1.4 billion in cash and equivalents during that time.
Mr. Schulze wrote that Credit Suisse is “highly confident” that it can arrange the debt.
In some ways, the situation is a little reminiscent of Coty’s failed attempt to buy Avon Products Inc.: A much smaller entity tried unsuccessfully to entice its target into merger talks, and then goes public with its offer. Then and now, the unsolicited suitor proposes a deal backed only by a highly confident letter, rather than fully committed financing.
It’s unclear how many partners Mr. Schulze would eventually work with. So-called “club deals,” in which several buyout shops team up, have proved unpopular since the end of the private equity boom in 2007. Limited partners, most of whom are invested in multiple funds, have increasingly balked at the practice, arguing that it increases their exposure to investments and reduces any claims to uniqueness on the firms’ parts.
Mr. Schulze may ultimately end up working with one firm, though that shop would then likely bring on a number of its limited partners as co-investors in the deal, according to a person briefed on the matter.
Monday’s disclosure followed weeks of efforts by Mr. Schulze to engage with the Best Buy board and begin performing due diligence, this person said. Minnesota law dictates that any shareholder who acquires a big stake in a company must wait four years before seeking any sort of business transaction. Since any members of a Schulze-led consortium would be new investors, they would be subject to the law — unless Best Buy gives them permission to begin talks.
That’s why Mr. Schulze has been fairly careful about not formally aligning himself with a buyout firm and saying only that he has been “discussing” bringing back two former Best Buy executives if his deal should succeed.
Over the weekend, however, Best Buy’s directors said that they needed about three more weeks to respond to his request, this person said.
The company said in a statement that it will “review and consider the letter in due course.” It has retained Goldman Sachs, JPMorgan Chase and the law firm Simpson Thacher & Bartlett as advisers.
It’s not quite clear that Best Buy shareholders believe a deal could happen. While shares in the company are up 9 percent as of midmorning on Monday, at $19.24 they remain well below the range that Mr. Schulze is proposing.
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|From: Sr K||10/12/2012 1:06:28 AM|
|Best Buy to Match Online Prices|
Best Buy is planning to match the prices of online rivals such as Amazon this holiday season, even as it plays down its concerns over shoppers using its stores as a showroom. 59 min ago
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|From: ChrisGillette||7/3/2013 5:44:41 PM|
|Looks like a good short candidate. Any thoughts?|
IMO, despite the recent hype and run-up in share price, Best Buy continues to face all of the same secular problems that it's faced over the last decade. In short, if Amazon doesn't kill it, then Costco, Walmart, and Target will...
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