[tzs]

Someone at Reddit pointed out something interesting, in response to a different article covering much of the same information.

Back when Circuit City was around, Best Buy was aggressively responding to Circuit City opening new stores by trying hard to put a Best Buy near that Circuit City. They would do this even if there was already a Best Buy within a few miles of that location.

Now that Circuit City is gone, Best Buy is left with quite a few stores that really have no reason to exist--they are too close to another Best Buy. These are a major contribution to the list of stores they are closing.

Closing these stores is not necessarily a sign of trouble.

[mcphilip]

Maybe that's true in some sort of a common sense perspective, but the closing of those stores still translates to diminished growth from an investor's perspective which will tend to really punish the stock price and put more pressure on the leadership for cost cutting and/or restructuring.

[ryanhuff]

I don't think I agree that slower growth due to closing stores necessarily leads investors to sell the stock. A typical metric in retail is same-store-sales. If you close a BB store that is in close proximity to another BB store, its possible (probable?) that the surviving store could see a jump in same-store-sales. Investors may see this as a good thing.

[webwanderings]

Isn't hhgregg the old Circuit City come back? These retail stores don't really go anywhere.

[tzs]

I've never even heard of hhgregg. Checking their store locator, I see why: they don't appear to have any stores west of the Mississippi.

They have been taking over some old Circuit City stores, but only in their regions where hhgregg already was.

Circuit City was nationwide (and so presumably many of the redundant Best Buy stores are nowhere near an hhgregg).