Samsung Electronics Co Ltd is planning to install its brand shops in
more than 1,400 Best Buy Co Inc stores this year, a move that some on
Wall Street said could help the world's largest consumer electronics
chain boost in-store traffic, sales and profitability.
The news pushed Best Buy shares up 12.5 percent to $24.36 on Thursday.
store-within-a-store effort is a key element of Best Buy's turnaround
plan, which includes dedicating more space to more-profitable products
like tablets and mobile phones. The company is also trying to use its
clout with suppliers to fight online and discount rivals.
analyst Christopher Horvers said the Samsung deal was "another step in
the right direction" and better positioned Best Buy against online
retailer Amazon.com Inc.
"Retailers and vendors are learning how
to better cope with online and pricing challenges to become more
profitable omnichannel retailers," Horvers said.
partnership with Samsung is akin to the Best Buy's tie-up with Apple Inc
as well as Dick's Sporting Goods Inc's partnerships with vendors Nike
Inc, Under Armour Inc and North Face.
Best Buy's latest move "is a
clear indication" that the retailer is better using its key
partnerships to boost traffic and sales, Horvers said.
Capital Markets analyst David Strasser said the move was "a wakeup call"
for Best Buy's other key partners - Google Inc, Sony Corp and Microsoft
"These vendors will also need to take up more space and
invest more heavily in Best Buy as a distribution partner," Strasser
Retailers such as Best Buy are also trying to find ways to
appeal to shoppers who own more than one mobile computing device and are
looking to connect them together and share content across multiple
The "Samsung Experience" shops will showcase the entire
range of the manufacturer's mobile products, including smartphones,
tablets, laptops, connected cameras and accessories.
Some Best Buy
stores will also have Samsung employees to help customers buy and
activate their mobile devices. The specially trained Samsung staff will
also help with product demonstrations, warranty registration and
The shops will vary in size, with the largest being about 460 square feet.
© Thomson Reuters 2013