Jason Bonfig wants to grow Best Buy by going smaller. Read that again. The incoming CEO told CNBC his strategy for expansion involves contraction. It's the corporate equivalent of losing weight by eating more cake.
This ranks somewhere between "military intelligence" and "jumbo shrimp" on the contradiction scale. Bonfig plans to enhance the customer experience, which in retail CEO speak means closing stores in your neighborhood and telling you it's actually better this way. You'll love driving an extra forty minutes to buy an HDMI cable you could've ordered on Amazon while sitting on the toilet.
The logic works if you squint hard enough. Fewer stores means lower overhead. Lower overhead means better margins. Better margins means the stock goes up. The stock going up means Bonfig gets his bonus. You not having a nearby Best Buy means you get f*cked. But you already knew that part.
Best Buy has spent two decades getting smaller whether they wanted to or not. Circuit City went under. RadioShack became a punchline. Fry's Electronics evaporated like it was never real. Now Best Buy looks around and realizes being the last man standing in a dying industry still makes you part of a dying industry.
Bonfig could expand into new product categories. He could revolutionize the in-store experience. He could figure out how to compete with online retailers on convenience. Instead he's chosen the path of managed decline with a positive spin. Brilliant.
Retail traders will see "expansion" and "customer experience" in the headline and buy calls anyway, because reading past the first six words is for people who hate money.
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