Sunday, March 2, 2014

Sony store closures likely good news for Best Buy

Sony's ( SNE) plan to close 20 of its 31 U.S. retail stores is likely good news for consumer electronics retailer Deal Of The Day ( BBY).

Consumers looking to buy Sony televisions, digital cameras, audio equipment and other gadgets will turn to independent retailers like Best Buy in the affected markets. In addition, Best Buy has been setting aside floor space for manufacturers looking to run product showcases and could do so for Sony.

On Thursday, Best Buy reported that it had opened 1,400 Samsung and 600 Microsoft ( MSFT) Windows stores-within-a-store as of Feb. 1. It also operates Apple ( AAPL) product showcases in its stores.

During the holiday season, Google ( GOOG) set up display tablets and end caps in 750 large-format Best Buy stores to show off Android tablets, Chromebook notebooks and Chromecast streaming video players.

On a conference call with analysts Thursday, Best Buy CEO hinted at more opportunities for product showcases from manufacturers. Among the company's priorities over the next 24 months is "to strengthen our vendor partnerships, including launching new vendor shopping experiences."

Could he be talking about Sony?

Sony announced its store closings on Wednesday, as part of a larger restructuring plan.

Five of the remaining 11 stores are located in California, with three in New York, two in Florida, and one in Texas, Sony announced.

The move will close two-thirds of Sony's U.S. retail stores and result in the lay off of 1,000 workers.

On Feb. 5, Sony said it would reduce its global workforce by about 5,000, or 3% of its staff, in its fiscal year ending March 31. It also announced plans to sell its Vaio PC business to Japan Industrial Partners.

Plus, Sony plans to split off its money-losing TV business as a wholly owned subsidiary and focus that business on high-end televisions, including 4K or Ultra HD TVs. Sony expects the TV business to return to profitability in fiscal year 2014, which ends March 31, 2015.

Sony has taken the actions to "maintain its competitiveness in an evolving consumer electronics market," the company said Wednesday.

While its consumer electronics business struggles, Sony appears to be doing well with its next-generation video game console, the PlayStation 4. The PS4 is the top selling next-gen console, outpacing rival Microsoft's Xbox One.

Best Buy stock was up more than 4% in late afternoon trading on the stock market today. Sony's U.S. shares up a fraction.

RELATED: Best Buy now an 'online first' retailer, CEO says.

Microsoft testing deals to boost Xbox One sales.


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