By Bryan Corliss
Herald Writer
Best Buy opened its first Snohomish County outlet late last week. But if you’ve bought a home theater, music disc or movie in the past year, chances are you’ve done it at a store Best Buy Inc. already owns.
Last year, Minnesota-based Best Buy bought both Musicland — the parent company of Suncoast Video and Sam Goody — and Magnolia Hi-Fi, the Seattle-based chain known for its high-end audio equipment and service.
It’s all part of an aggressive nationwide expansion strategy, said Best Buy spokeswoman Laurie Bauer.
"We can only open so many Best Buy stores in the United States," she said. "Then what? Where is our growth? We need to acquire different customers."
Best Buy on Friday staged grand opening celebrations at four new Puget Sound area stores, including one at 19225 Alderwood Mall Parkway in Lynnwood.
Best Buy is one of two national leaders in the consumer electronics business, along with Circuit City.
| Best Buy facts
No. 1 seller of computers, consumer electronics, music and movies, based in Eden Park, Minn.
Sales in most recent fiscal year: $15.2 billion, average of $39 million for 1,800 stores in United States, Puerto Rico and U.S. Virgin Islands. Profit: $3.05 billion
Also owns: Magnolia Hi-Fi, Media Play, On Cue, Sam Goody and Suncoast.
Snohomish County presence: New Best Buy in Lynnwood, Magnolia Hi-Fi stores in Everett and Lynnwood, Sam Goody store in Everett, Suncoast stores in Everett and Lynnwood.
Main competition: Circuit City has stores in Everett and Lynnwood. |
The product list includes digital cameras, music CDs, DVDs and players, flat-screen TVs, computer hardware and software for home and office, video games and players, refrigerators and dishwashers.
The range is broad — and midmarket, Bauer said. Compared to Magnolia Hi-Fi, for example, Best Buy’s stereo and video equipment ends at the price level where Magnolia’s begins.
On the other hand, Best Buy stores offer more kinds of entertainment hardware than its Sam Goody or Suncoast sister stores, she said. Those stores sell and rent CDs, videos, game discs and DVDs. Best Buy offers the equipment needed to play them, along with a selection of music and movie discs.
In addition, Sam Goody and Suncoast are mall-based retail chains that tend to attract younger customers than Best Buy’s stand-alone stores.
Having all the chains under one corporate umbrella has allowed Best Buy to expand its customer base to include new customers at both ends of the spectrum, Bauer said.
Each "appeals to a different crowd," she said. "We don’t think we compete against each other."
Best Buy will continue to expand through acquisitions this year, she said. The company is seeking regulatory approval to buy the Canadian FutureShop electronics chain.
Best Buy initially had planned to start a new division of Canadian Best Buy stores, but the FutureShop deal was more appealing, Bauer said.
FutureShop already is well-regarded in the Canadian market, she said. "We save ourselves years of work and money" by acquiring it.
But the company also plans to expand its core brand by opening more Best Buys. The goal is to open 60 new stores a year through 2004, which would give the chain 650.
The Lynnwood store was one of 11 Best Buys to open nationwide on Friday. Along with the new Northwest stores — in Bellingham, Federal Way and Silverdale — the company opened stores in suburbs of Chicago, Cleveland, Los Angeles, San Francisco and New York, plus stores in Joplin, Mo., and Birmingham, Ala.
The Birmingham store is the first in Alabama, Bauer said.
Best Buy also plans to expand Magnolia Hi-Fi with two new stores in California.
With 13 stores, the Magnolia chain is dwarfed by the rest of Best Buy. But the acquisition will pay big dividends for Best Buy in the future, the company said in its most recent annual report.
Magnolia gives Best Buy "access to an entirely new customer," the report said. This customer base is among the first to adopt new technologies and equipment, which will "provide us with insights into consumer acceptance of audio and video products as soon as they come to market."
With that knowledge, Best Buy will be able to add new product lines early on, while profits on those products are at their highest.
"We have much to learn from Magnolia Hi-Fi," the report said.
Friday’s openings will give the company six Best Buy stores around Puget Sound. It opened two stores last year, at Northgate Mall in Seattle and in and Tukwila.
There aren’t any more openings in the pipeline, Bauer said.
You can call Herald Writer Bryan Corliss at 425-339-3454
or send e-mail to corliss@heraldnet.com.
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