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Best Buy Canada sales sputter as parent seeks turnaround

Sales are falling at Best Buy Canada, as its parent, Best Buy Co. (NYSE:BBY), grapples with a tough economic environment, a new CEO who has no retail experience and a stock that is languishing near nine-year lows.
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Best Buy Canada Ltd., Best BUY Co., Inc., retail, Best Buy Canada sales sputter as parent seeks turnaround

Sales are falling at Best Buy Canada, as its parent, Best Buy Co. (NYSE:BBY), grapples with a tough economic environment, a new CEO who has no retail experience and a stock that is languishing near nine-year lows.

Best Buy Canada told Business in Vancouver last year that it employs 19,944 staff including 4,042 in B.C. and that its sales totalled more than $5.6 billion in 2010 – enough to rank as B.C.’s second-largest private company.

It saw a second-quarter 2012 sales drop in percentage terms in the “high single-digits” compared with the same quarter a year ago, parent Best Buy Co. revealed August 21. That drop was in both Best Buy Canada’s Future Shop and Best Buy-branded stores and stemmed from sluggish laptop computer, digital imaging and home theatre sales.

Sales in Best Buy Co.’s international division, which also includes stores in China and Europe, fell a similar 8.2%.

Best Buy Co. withdrew its full-year earnings guidance August 21 after reporting a 90% drop in net income to US$12 million during the second quarter compared with $128 million in the same quarter in 2011, thanks to restructuring charges and weak sales. Revenue declined nearly 3% to $10.55 billion.

Earlier this week, Best Buy Co. unveiled new CEO Hubert Joly. Joly is a former CEO of the Carlson travel company and is a turnaround expert, but has no experience at a retail venture.

The company announced a 3.8% annual dividend, to be paid quarterly, but it was not enough to keep shares from slumping on August 22 to US$17.72, which is the lowest price since early 2003.

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@GlenKorstrom