Page 1 of 2
Some retail executives think that a potential Blockbuster -- Circuit City combination is a bust, a marriage of two troubled players with little hope of a brighter future.
Retail executives at RetailVision 2008, which is owned by ChannelWeb parent Everything Channel, a division of United Business Media, say they see few synergies between the two companies.
"It's like seeing the Titanic buy Enron," said one executive for a competitor who did not want to be identified.
Blockbuster, the nation's largest video rental company, formally announced this week that it was making what amounts to a hostile bid to buy Circuit City for more than a $1 billion. Blockbuster has offered at least $6 a share for the number two consumer electronics retailer, a 54 percent premium over Circuit City's closing price last Friday. Blockbuster shares fell 10 percent to $2.81 on Monday after the unwelcome bid was disclosed. Circuit City shares closed up 27 percent to $4.97.
Kevin Jones, the vice president of merchandising for Micro Center, a 21 store national chain which has enjoyed considerable growth with PC-passionate consumers that make $100,000 or more, said he is not worried about a potential Blockbuster Circuit City combination.
"You have to find a model that works," said Jones after a session at RetailVision. "Blockbuster doesn't have a model that works. Circuit City doesn't have a model that works. How do you put the two together and make it work? How do you make it profitable? It's business 101."
"You have to have a business model that is replicatable before you start buying somebody," he said.
Jones compared the Blockbuster-Circuit City deal to a deal many years ago in which CompUSA bought Good Guys, a home theatre and audio retailer. "Neither model at the time was proven and replicatable," he said. "I just don't know how you could take two unreplicatable models, bring them together and make a winning solution."
Jones attributes Micro Center's success to sharp focus on the high income passionate PC consumer. "It has to do with discipline in your business model and not getting distracted," he said.
Jones said Circuit City got distracted by chasing Best Buy. "You can't run your business by letting everybody tell you what you should be doing," he said.
|
18 Attention Grabbers From CES Opening Night OK, so the recession is still lurking like a hungry panther, but that doesn't mean people aren't still captivated by the latest gadgets. Although CES 2010 isn't as big as in previous years, exhibitors at a special opening night event Tuesday showed off products that were dazzling, intriguing, and often downright amusing. Here we offer a glimpse of 18 products that had onlookers jostling for a better look. |
|
Hot Products Ready For The 2009 Holiday Season At Pepcom's holiday preview event, we got the jump on many new and interesting products, some presented for the first time ever. Here are a few of our favorites. |
|
Clash Of The E-Book Titans: Sony Reader Vs. Amazon Kindle Vs. Plastic Logic Sony's three new Readers are set to challenge Amazon's Kindle dominance, so we size up Sony Readers, Amazon Kindles and the coming Plastic Logic reader to see who really has the e-reading goods. |
 More
Slide Shows |
- Blockbuster Bid For Circuit City Starts Wild Stocks Reaction
- Circuit City, Flailing, Looks to Higher Margins and More Services
- Best Buy Shares Fall After Missing Q1 Sales, Earnings Expectations
- Amazon Kindle Arrives At Target Stores On Sunday
- Circuit City Is Back, Return Policy Isn't
- Systemax Agrees To Purchase Circuit City Assets
