Best Buy’s One Change That’s Saving Its Business

by Business Insider | November 20, 2013 8:30 am

Best Buy Best Buy's One Change That's Saving Its Business Best Buy’s (BBY) amazing turnaround keeps gaining momentum.

The retailer’s share price has more than doubled[1] in the past year as CEO Hubert Joly makes changes that are helping Best Buy compete against retailers like Amazon (AMZN[2]) and Wal-Mart (WMT[3])

One change has been especially instrumental in saving Best Buy, according to a recent note by analysts at Piper Jaffray (PJC[4]).

Best Buy is executing “space optimization,” according to the analysts.

In other words, Best Buy is replacing “10% of big box stores previously allocated to physical media with more profitable products.”

Examples of space optimization include Best Buy’s new Samsung (SSNLF[5]) Experience shops and Microsoft (MSFT[6]) Windows stores, according to research firm Trefis[7]. 

These profitable businesses replace stale, outdated merchandise at Best Buy, and attract more customers.

Best Buy will see massive profits from space organization over the next two years, according to the Piper Jaffray note.

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Endnotes:
  1. has more than doubled: http://finance.yahoo.com/echarts?s=BBY+Interactive#symbol=bby;range=1y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
  2. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  3. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  4. PJC: http://studio-5.financialcontent.com/investplace/quote?Symbol=PJC
  5. SSNLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=SSNLF
  6. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  7. research firm Trefis: http://www.trefis.com/stock/bby/articles/202253/best-buys-earnings-improve-on-its-turnaround-strartegy/2013-08-21
  8. Best Buy Earnings Deal BBY Stock a Blow: http://investorplace.com/2013/11/bby-stock-best-buy-earnings/#.Uova-if-L08
  9. BBY: Could We See a Quadrupler in Best Buy Stock?: http://investorplace.com/2013/10/best-buy-zooms-bby-aapl-amzn-wmt-msft/#.UovbPCf-L08

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