Amid predictions that the electronics retailer is gradually going out of business, Best Buy reported flattened revenues for the holiday season, held back by a significant drop in its games category.
Amid predictions that the electronics retailer is gradually going out of business, Best Buy reported flattened profits for the holiday season, held back by a significant drop in its games category. The diminished video game sales continues a downward trend for the category in Best Buy's recent quarterly reports. Other store chains have suffered similar struggles -- Toys R Us attributed its Q3 losses to an "overall softness across the video game industry." Though Best Buy's revenues during December 2011 were about the same year-over-year at $8.4 billion, the company said that "gaming and digital imaging both experienced low double-digit declines in comparable store sales." Those losses, along with single-digit declines for television sales, more than offset gains made in other categories such as tablets, eReaders, and smartphones, which delivered "strong growth" in the low triple-digits in December. Best Buy admitted that it saw customer traffic also drop at its brick and mortar locations, as sales at stores that were open for at least two years fell by 1.2 percent. Online sales, however, jumped year-over-year by 26 percent. The news follows days after the company received plenty of negative media attention sparked by a critical Forbes article claiming Best Buy is going out of business gradually due to its poor customer service experience compared to online retailers. Best Buy CEO Brian Dunn, though, remained upbeat about the company's sales: "We built off of share gains in the third quarter to deliver December sales that we believe compared favorably to the retail [consumer electronics] industry." "Based on our performance in December we continue to expect to achieve our annual guidance," he added.
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