Best Buy, who has seemed to operate above the ugly economic fray of the past six months, announced today that they are pulling in the reigns with their spending as offering buy-outs to nearly every one of the 4,000 headquarters employees. Best Buy is based in Minneapolis, Minnesota.
The deal Best Buy is offering its employees includes over seven months of severance pay, health and life insurance for a year and free outplacement advice. The key is the employees need to leave before January 1, 2009.
More than half way through the trading day Best Buy (BBY on the New York Stock Exchange) was up over $3.00 per share or 16 percent to nearly $27.00 per share. Their 52 week high is $53.60 from December of 2007.
Electronics remain hot with consumers but consumer spending is cold this holiday season. Best Buy is doing like most other companies in America as well as around the world and tightening up on their cost structure as to adapt. Competing Circuit City filed for Bankruptcy only weeks ago and will close upwards of 150 stores. Tweeter has filed for chapter 7 liquidation and is basically selling off everything they own to pay back investors. Warehouse stores like Costco and Wal-Mart have taken much of the profit out of today's HDTV driven AV purchases leaving the big box and mid-level retailers reeling.
Sources: Morningstar.com, UBS.com, Twice.com