Best Buy’s silver lining: Its mobile business.
The big-box retailer’s saving grace has been its still humming mobile-devices business. But is it enough to save the company?
At least Best Buys still has its cell phone business.
On the heels of a disappointing quarterly report and today’s resignation of CEO Brian Dunn, it’s easy to think the entire company is doomed to follow in the steps of fallen electronic chains Circuit City and CompUSA. Yet its mobile devices business — cell phones in particular– has been impressively resilient during its recent troubles.
The cell phone business, which Best Buy has spent time and money building up, represents one of the rare bright spots in the company. Over time, Best Buy will likely be more heavily weighted towards the mobile business. Unfortunately, it may not be enough to save the entire company and offset the big declines in its other businesses.
When Best Buy reported its fiscal fourth-quarter results last month, most of its segments saw revenue declines, particularly a steep one in the entertainment category, as DVDs and Blu-ray discs took a big hit. But the computing and mobile phones segment posted growth of 7.6 percent in same-store sales over the previous month. By itself, the mobile phones business likely would have grown even faster.
That’s important because that unit makes up nearly 40 percent of the company’s total revenue for the month. The appliances business, which was the only other segment to show growth, only represents 5 percent of total revenue.