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TheStreet Open House

Best Buy: As Pathetic as Sears, JCP (Updated)

**Updated from 12:03 PM EST with comments from Wedbush analyst on Page Two.

NEW YORK (TheStreet) -- There's one thing -- that isn't really real -- that sets Best Buy (BBY) apart from Sears Holdings (SHLD) and J. C. Penney (JCP).

The products they sell.

If you removed the inventory from BBY, SHLD and JCP stores, nobody outside of a retail real estate salesperson would be able to tell the difference. Each building represents the soulless shell of a once-thriving industry treated with utter disrespect by Jeff Bezos and Amazon.com (AMZN).

That's how you have to look at Best Buy, company and stock. As that sterile big box pit with almost as few redeeming qualities as a crack house. Because once you put the product back in, you might be fooled.

And you were fooled, in the best possible way, in 2013.

Somehow BBY managed to soar 237.68% last year.

Take products that intrigue and inspire, rearrange them around the store and you can make believers (or momo chasers) out of otherwise intelligent people.

Sign me up for Hubert Joly's gig. Please. I'll do my best not to feel guilty to the point of suicide for effectively stealing my salary from the rolls of a public corporation.

I published an endless scroll of BBY warnings throughout 2013 (and 2012). One of the most recent came in November -- Sell Best Buy, It Has No Pulse.

The message could not have been any more clear, not to mention spot on. Same goes for the analysis. An analysis that still stands:

(Best Buy) is what happens when you put MBA types or retail lifers in charge of a situation that requires dynamic wholesale transformation.
Managers can be fantastic at cleaning up near-term messes by cutting prices, realigning "teams" and slashing expenses. However, cats of this ilk tend not to be the best visionaries. The very thing physical retailers need, they lack and, worse yet, refuse to secure.

If you read the recaps of Best Buy's holiday quarter earnings report or listen to the call itself, it remains clear the company as well as bullish Wall Street analysts still have absolutely no clue.

Joly referred to the quarter's woes as a "speed bump" that doesn't change the long-term plan. He claimed Best Buy had no choice but to be price competitive as to "defend our market share" during the holidays.

Looking forward there's more of the same retail boilerplate from Joly.

Just read the last paragraph in the above-linked recap of the earnings. He's just another guy with a business degree, mired in retail's culture of obviousness (a phrase I coined a year ago in another bearish BBY piece), who has absolutely no idea how to move his company, let alone the space, forward beyond short-term window dressing.

As one BBY source told me this morning: (Best Buy) burned the furniture to build a fire.

That's an apt assessment.

If you're a nimble trader or an investor who understands what you're buying, I guess it made sense to hold BBY through 2013 (obviously!). It might even make sense to grab shares now on the inevitable rebound owed to the slew of analysts who will, once again (and blissfully!), put their ignorance on display as they play CYA on CNBC.

Just understand what you're buying. You're not buying a real company with a sound plan for the long-term. You're not investing in shares floated by a firm that understands the dire predicament physical retail is in and is moving aggressively and innovatively -- with vision -- to lead the way out.

You're investing in a Board of Directors and a CEO as corporately pathetic as the worst Sears and JCP have to offer. It's another case where the rank and file of the operation (and I know a few at BBY, past and present) are good people who should not have to deal with the wholesale incompetence of their leaders. Many have already jumped ship. Expect more to follow suit because, believe me when I tell you, internally there are a quite a few Best Buyers not buying what Viva Joly is selling.

UPDATE: Hit Page Two for a take from one of just a wheelbarrow full of Wall Street analysts' worth quoting ...

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