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Best Buy's Price-Shredding Turnaround Is Working

A Black Friday shopping jam at a Best Buy outlet in Peoria, Ill.
A Black Friday shopping jam at a Best Buy outlet in Peoria, Ill.Photograph by Daniel Acker/Bloomberg

A long-awaited turnaround appears to be taking hold at Best Buy. The electronics retailer on Tuesday reported its best quarterly results in two years, cheering investors who had long wondered whether the sale of TVs, stereos, and other entertainment gadgetry had shifted permanently to the Internet and forever away from big-box retailers such as Best Buy and defunct Circuit City and Tweeter.

Best Buy, at least, seems to have put to rest immediate concerns about its demise. Chief Executive Officer Hubert Joly, who marked his first anniversary at the helm this month, has already managed to cut annualized costs by $390 million and steer the company on a broad restructuring path dubbed “Renew Blue,” which seeks $725 million in total savings. The former McKinsey & Co. management consultant is known as a corporate turnaround specialist, and he was hired specifically to address Best Buy’s many woes.