Best Buy

Our vision is to make life fun and easy. Our business strategy is to bring technology and consumers together in a retail environment that focuses on educating consumers on the features and benefits of technology and entertainment products, while maximizing overall profitability. We believe our stores offer consumers meaningful advantages in store environment, product value, selection and service, all of which advance our objectives of enhancing our business model, gaining market share and improving profitability. The Future Shop and Magnolia Hi-Fi acquisitions provide us with access to new distribution channels and new customers. After expanding offerings to include appliances and VCRs, revenues reach $9.3 million. Best Buy gains a listing on the New York Stock Exchange; revenues reach $239 million from 24 stores. Company introduces its Concept II stores, which have a warehouse format and no commissioned sales help. The Concept IV format debuts, featuring more high-tech products, merchandise grouped in such departments as home theater, cash registers throughout the store, and "high touch" areas for digital products where more employee interaction is needed. Best Buy relaunches an expanded bestbuy.com web site; Seattle-based Magnolia Hi-Fi, Inc., operator of 13 high-end consumer electronics stores on the West Coast, is acquired for $88 million. Minnesota-based Best Buy Co., Inc. is the leading consumer electronics retailer in the United States, far outpacing archrival Circuit City Stores, Inc. in revenues if not in store count. In early 2004, the company's flagship Best Buy chain included more than 600 stores in 48 states (the exceptions being Hawaii and Wyoming) as well as 19 more in Canada. In addition to personal computers, computer peripheral equipment, and consumer video and audio products, Best Buy outlets, which are on average about 44,000 square feet in size, offer large and small appliances, ranging from refrigerators to coffeemakers, and entertainment software, including compact discs, video games, DVD and VHS movies, and computer software. In the early 2000s, Best Buy acquired two other chains: Seattle-based Magnolia Audio Video and Burnaby, British Columbia-based Future Shop. By early 2004, Magnolia Audio Video, formerly called Magnolia Hi-Fi, operated 19 stores in Washington, Oregon, and California offering high-end consumer electronics and providing expert design and installation services. These stores are about 10,000 square feet on average. Future Shop, operating more than 100 stores throughout Canada, is that nation's largest electronics retailer, offering a wide selection of digital products, televisions, computers, music, and appliances. The average Future Shop outlet occupies approximately 21,000 square feet of retail space. Each of the company's business units also runs an electronic shopping web site on the Internet. Overall, Best Buy's revenue mix has consumer electronics generating 37 percent of the total revenues; home office products, 35 percent; entertainment software, 22 percent; and appliances, 6 percent. Best Buy is the brainchild of the company's founder and chairman, Richard M. Schulze. In 1966 Schulze and a partner established Sound of Music, Inc. and opened their first store in St. Paul, Minnesota, in an attempt to capture a share of the Twin Cities' home and car stereo retail market. First-year sales reached $173,000. Four years later Schulze bought out his partner and proceeded to expand his retail chain; his product line, however, was limited to audio components until the early 1980s. Then, according to an Executive of the Year cover story for Corporate Report Minnesota, Schulze said, "The lights began to turn on." Writer S.C. Biemesderfer explained: "Schulze had come to realize that there wasn't much of a future in a market glutted with vendors, serving a shrinking audience of 15- to 18-year-olds with limited resources." His ability to alter the course of his company was enhanced by