What’s left of what once was once the “audio industry” is quaking in its boots and living on borrowed time. That in the wake of retailer Best Buy‘s latest financials. The country’s last surviving, large scale consumer electronics retailer reported a first quarter net loss of $81 million compared with a year-earlier profit of $158 million.
Can the company survive?
“Oh, I think they have enough cash to last three years, maybe two years, if they can turn things around,” says legendary audio/video guru John Kiefer of Kiefs Audio Video in Lawrence.
“No, because for Best Buy to turn things around they’re going to have to downsize a number of stores and as of right now they have approximately 1056 stores,” Kiefer says. “A year ago they had around 1,500 stores. Their year-to-date growth is minus 3.1 percent – that’s a huge loss from last year and they’re closing out Canada and other areas.”
Kiefer’s gut level?
“My gut level is it will take a year to see – the new CEO is trying to stop consumers from price shopping – but I don’t think they can (make it). Because first of all, they’ll have to get rid of the blue shirts and bring in somebody who actually knows something about the different equipment and models instead of just walking around and handing you a bottle of water.
“Secondly, they have to get rid of 40 percent of their space and 40 percent of their dollar value of inventory, and then they could be profitable.”
Get rid of what exactly?
“Well, how are they doing in vacuum cleaners? Get rid of CDs and DVDs.”
The $64 million question: Is there life for audio gear and gearheads after Best Buy?
“Yeah,” Kiefer says. “Because somebody like Menards will put in an audio department. And Target could add audio. Look what Nebraska Furniture Mart has done. They don’t have any audio to speak of. If you went in there and bought their best audio system – I’d give you that crap – it’s worthless. It’s not junk – it’ll sound good, it’ll play good – but if you had any kind of ear at all you wouldn’t buy it.
“If the six Best Buys in the Kansas City area closed their doors and each one say was doing a million dollars in sales, that’s $6 million. And Nebraska Furniture Mart could pick that up.”