After years of slipping sales and struggling performance among retail stocks, Best Buy Co Inc. (NYSE: BBY) has decided to revamp -- a long overdue move to hold on to customers and investors.
Best Buy announced today (Thursday) that it would close 50 stores and redesign its big box business model to compete with online retailers.
Best Buy, the world's largest consumer electronics retailer, has suffered six straight quarterly sales declines at stores open at least 14 months. It also reported Thursday a fourth-quarter loss of $1.7 billion.
The news triggered Best Buy shares to slide almost 10% in early morning trading.
Best Buy's initiative to finally update its business model and adapt to a changed retailing landscape could be too late to salvage sinking investor confidence, signaled by today's selloff.
"We are concerned that a turnaround of this magnitude will further weaken Best Buy and increasingly distance it from its vendor partners and core customers in an already very precarious environment," Oppenheimer analyst Brian Nagel told MarketWatch.