The 1-Year Turnaround Plan That Actually Worked

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Nov. 13 (Bloomberg) -- BB&T Capital Markets Analyst Anthony Chukumba and Bloomberg Businessweek's Sam Grobart discuss Best Buy's turnaround with Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Buy at the low.

You nailed it.

How did you know you would get this right?

We did not know a lot, but we knew sharon maccoll and.

We knew -- she was the chief marketing officer.

She was a chief financial officer at williams-sonoma.

She came on as the chief financial officer at best buy and i just knew that not only does she have a strong background, she has successfully tackled a lots of the challenges that best buy was facing, particularly driving online sales and cutting costs.

I have heard so many great things about her from the private equity guys who or around the this a year ago and weighing whether or not to make an investment or take it private.

We tend to forget they are the big users -- losers here because they were not successful in pulling together a deal for an investment in the company itself.

There were a lot of things that did not line up correctly on that front.

Everybody is winning, it seems like.

They did not get a chance to buy because there were too many other people that were not willing to sell and make a bet on the public shares.

Rex i think they knew there was so much a low-hanging fruit here and they were not willing to let the private equity firms.

When you say low hanging fruit, help us understand what that means.

There was a huge cost-cutting opportunity.

Best buy had weight too many administrative expenses.

Now the margins are suffering for it, right?

Wax actually, last quarter, margins grew year over year for the first time in quite some time.

That has started to reverse.

Come back.

Another positive.

At a collective people were scared this could turn into a circuit city situation, but i guess if you had your head screwed on straight, you would see there had to be at least one physical store out there selling these large appliances and televisions that people could check out and see.

The problem, and you know this well, is getting people to buy something once they come in the room.

You walked around the store.

Is that something you can speak to, the show room in?

Exactly.

Show rimming is supposed to be killing best buy but they seem to have grabbed control of that because they have done a couple of things.

They instituted a price match guarantee so even if you are in the store and put your smart phone and to show them amazon is selling it for less, they will drop the price right there on the spot.

They had you in the store.

Why not have you walking out with a product question mark i asked him about the concept of show rimming that was supposed to break the back of best buy.

It didn't. here's what he told me about one year ago with regards to show rimming.

We love show rimming.

People come to our stores.

15% of the people who come to a best buy store with the intention to buy online.

I love that.

We have 600 million visits to our store every year.

One billion visits to our websites.

Once people are with us, we are working extra hard to take care of them.

600 million people coming into the store and when billing to the website, those are impressive numbers.

Maybe you can speak to the fact that they have two things that no one else has.

They have the geek squad and they have samsung stores.

How big is that been?

Geek squad is a competitive differentiator, when you stock about installations and just kind of technical service support.

The samsung stop & shop's are huge and there will be others as well.

Like what?

Rex we think you will see a google stop & shop and the sony, maybe lg and maybe smaller manufacturers like beats headphones.

That is noteworthy.

Absolutely.

So you are maintaining your bike?

Absolutely.

You say this is going faster further, stay with it?

When you look at the valuation, it is not all that expensive.

Our current target is 46, but the company will report earnings next week we'll adjusted afterward.

There is your chance.

He will raise his target.

Buy now while you still can and it's still cheap.

Thank you for being here.

As always, enjoyed your

This text has been automatically generated. It may not be 100% accurate.

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