Is Circuit City Stores (NYSE: CC) sending signals that it wants to be acquired? The consumer electronics retailer has posted two dismal quarters recently as well as sending mixed signals on how it plans on handling employee headcount. The retailer's admission that it wants to get rid of 3,400 employees (and re-hire some back as significantly lower pay) and losing a few hundred store managers to attrition while adding new stores sounds like a hodge-podge of confusion to me.
Meanwhile, Best Buy (NYSE: BBY) is wiping its feet on the doormats of Circuit City stores nationwide and the retailer must do something. Even though Best Buy and Circuit City sell essentially the same products, the merchandising and retail finesse Best Buy continues to demonstrate is not being echoed by Circuit City, which blames drastic price reductions in flat-panel televisions as a main driver for quarterly losses as of late. Best Buy? Not so much -- it's making a profit.
With Circuit City shares sitting at the $15.88 mark as I write this, is the consumer electronics retailer ripe for a buyout or acquisition? An acquisition does not make sense, but taking the company off the market just might. As you may recall, Circuit City rebuffed an offer in 2005 from a Boston hedge fund at $17 per share -- and now it's below that and probably not going to rise above $20 anytime soon. With a single share of CC being cheaper than a DVD in one of its stores, would a private equity outfit want to make an offer so that shutting down some stores and renovating others in higher-volume areas could be accelerated? Now may be the time.
Meanwhile, Best Buy (NYSE: BBY) is wiping its feet on the doormats of Circuit City stores nationwide and the retailer must do something. Even though Best Buy and Circuit City sell essentially the same products, the merchandising and retail finesse Best Buy continues to demonstrate is not being echoed by Circuit City, which blames drastic price reductions in flat-panel televisions as a main driver for quarterly losses as of late. Best Buy? Not so much -- it's making a profit.
With Circuit City shares sitting at the $15.88 mark as I write this, is the consumer electronics retailer ripe for a buyout or acquisition? An acquisition does not make sense, but taking the company off the market just might. As you may recall, Circuit City rebuffed an offer in 2005 from a Boston hedge fund at $17 per share -- and now it's below that and probably not going to rise above $20 anytime soon. With a single share of CC being cheaper than a DVD in one of its stores, would a private equity outfit want to make an offer so that shutting down some stores and renovating others in higher-volume areas could be accelerated? Now may be the time.
