So, you just showed that they did, in fact, gain sales.ClownLoach wrote: ↑March 16th, 2023, 5:16 pm Here's another way to look at the situation: Circuit City brought in $12B a year at bankruptcy and Best Buy was at $55B a year. In the 12 months after Circuit City finished liquidation Best Buy staffed up, rushed new stores, and even took over many Circuit City Store locations to capture share. The sales for that 12 month period were... $53B. So a $12B a year retailer disappeared and their #1 competitor not only didn't gain a dollar of sales but actually lost revenue. Now they only bring in $46B a year.
The margin percentages have remained tight and the prices have declined 75%, but the longevity of the products has also greatly improved. There was a short term rush to adopt new technologies like LCD TVs and iPhones but ultimately that has slowed down as technology hasn't really advanced much in recent years. The point is that the electronics business was always very difficult to be in. You had to increase the transaction count to offset the declining average retail. And more transactions means more labor cost on lower revenue. It's just a miserable business and that's why you continue to see electronics retailers of all sizes and shapes disappear, and will continue to do so unless they've got a really good niche. Micro Center has a fantastic niche - they're the last standing "build your own computer" national chain, they don't have any debt, they pay for new stores and remodels with cash, and they're incredibly good at selling profitable warranties and such because they maintain a commissioned sales force (on a policy of you don't sell you don't get paid, you lie when you sell you lose extra commission on all returns).
$55 Billion + $12 Billion = $67 Billion
Prices drop 75%, so 25% of $67 Billion is $16.75 Billion.
However, you state they are now bringing in $46 Billion, which is about 2.75 times what it should have been had they only sold the exact same amount of items at that 75% lower price.
So, somewhere, they sold enough additional items to make $29.25 Billion dollars of sales (meaning more than doubling the actual sales from the two chains previously).
Then again, how much they SELL still isn't the key part, it's how much money is LEFT (Profit) at the end of the day - you can sell any amount you want, but if you pay more for it than you sell it for, you don't make money or stay in business very long