BBY missed by 2 cents and wow their stock get a real haircut today. Here is the reason:
Best Buy Co. Inc. has been adding personal shoppers, business experts, and home theater installers so it could focus on its most profitable customers. But its hiring spree dragged third-quarter profits down by 7 percent, and on Tuesday Best Buy trimmed its full-year forecast.
I guess going after their big dollar customers has hurt the bottom line quite badly. I guess trying to shoehorn personal shoppers and such into such a low margin business like electronics was the recipe for disaster. It seems that some other companies can get away with this extra service quite well. I guess when people buy a $399.99 PC they don't care where they buy it from or how good the extra service is.
I mean most of the time a person's children/friends can be as good as the Geek Squad, businesses know what they want, and most people can install a home theater quite easily. Also personal shoppers are for people that shop at Neiman Marcus and not for people looking to buy some DVDs and an Ipod for Christmas.
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