This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Best Buy: Making Physical Retail Increasingly Irrelevant

NEW YORK ( TheStreet) -- If I was relegated to covering only retail companies, TheStreet would need to put me on suicide watch. It would have to take away all of my Morrissey and Elliott Smith records as well as Springsteen's Nebraska. Put me on the first floor of the hotel when I come to New York.

What a sad, melancholy-inducing lifeless sector that retail.

After visiting CityTarget locations in San Francisco and Westwood, I became even more depressed about the state of brick and mortar.

Target (TGT - Get Report) delivers smoke and mirrors a la Reed Hastings when it touts its urban locations as somehow distinct from its standard, sterile suburban strip mall outlets.

As I explained in December, there's little difference between a CityTarget, a SuperTarget and anything in between:
...Target breaks down how many square feet of real estate it uses by store type: Target general merchandise stores (395 stores, as of end of Q3); expanded food assortment stores (1,130); SuperTarget stores (251); and CityTarget stores (5).
On average, SuperTargets take up the most square footage at 177,291 apiece. Expanded food stores come in at 129,281 per. General merchandise stores run 119,084 square feet each. And CityTargets are not too far behind thus far at 102,800 square feet per location. Once inside you really cannot tell the difference between the stores, with SuperTarget the obvious exception.

Target brings on the melancholy with a strategy that could be so much more meaningful. As it stands -- other than being an unimaginative workaround urban-oriented city planning regulations -- there is no meaning. CityTarget is nothing more than a smaller store. That's it. Zero innovation.

This lack of anything resembling thoughtful disruption pervades the retail sector with the exception of what Steve Jobs pioneered way back when at Apple (AAPL - Get Report) and Howard Schultz pursues relentlessly with lots of help from mobile and digital at Starbucks (SBUX - Get Report).

Most retailers pull from the same failed bag of tricks, copying one another as they create false hope among investors. Because Bill Ackman says its so, we can officially call Ron Johnson's tenure at JCPenney (JCP - Get Report) a "disaster." What has Johnson done other than nothing? Stores within stores do not represent innovation, transformation, revolution or any of the positive buzzwords we misguidedly associated with Johnson's name while at Apple.

At least Wall Street reacts properly to Johnson, by and large abandoning JCP stock. But, somehow, a company equally as lame -- Best Buy (BBY - Get Report) -- thrives in pretty much the same environment.

Best Buy announces a store-within-a-store strategy with Samsung and its stock tacks another percent on to its patently absurd 115% year-to-date increase. This run transcends dead cat bounce. In fact, the feline dove from the top of the skyscraper and landed on its feet.

If the Samsung deal continues this trend -- with Microsoft (MSFT - Get Report) and BlackBerry (BBRY - Get Report) jumping aboard -- there will still be absolutely nothing to get excited about.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 0.00%
BBY $31.48 0.00%
BBRY $7.82 0.00%
JCP $8.21 0.00%
MSFT $53.93 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs