Investing to Wealth

Filed under: Competitive strategy, Best Buy (BBY)

Best Buy, Inc. (NYSE: BBY) CEO Brad Anderson indicated this week at the World Economic Forum in Davos, Switzerland that the largest consumer electronics retailer in the U.S. would be looking at about-to-be-vacated retail locations that are closing due to Circuit City's ongoing liquidation that's expected to run until sometime in March.

Where it makes sense, Best Buy could most likely snap up locations for smaller-format stores for its Best Buy Mobile operations or other concept stores it would like to test. It certainly will be able to acquire some former Circuit City locations on the cheap. It's a good move as the mass market consumer electronics retailer experiments with growing sales outside the standard big-box format.

Best Buy continues to be a solid pick if you're looking to add a fundamentally strong company to your holdings. It's weathering the consumer economic downturn but is not exactly shining in terms of sales or profit. With its largest independent competitor out of the way, though, Best Buy will stand high above the competition when consumer dollars return to retail -- and they will. Mass merchants like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) will always service the consumer electronics consumer, but neither has the breadth of products Best Buy has in many consumer electronics categories. One thing consumers continually indicate they want is choice. Best Buy provides that pretty well.

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