Minneapolis – Everyone knew Circuit City was having a bad fourth quarter. Which made Best Buy’s good one a little bit of a surprise.
The results reported Wed nes day by the nation’s two largest electronics chains showed Best Buy increasing its lead over its smaller rival, with profit up 18 percent, while Circuit City lost money.
While Best Buy profits from its operations outside the U.S., including China, and a major push into selling installation and advice in addition to televisions and iPods, Circuit City is closing Canadian stores and replacing 3,400 workers with cheaper help.
“I think Best Buy is just executing on all fronts. They’re clearly the winner in this space, and pulling away,” said Joseph Feldman, who covers electronics retailers at independent research firm Telsey Advisory Group.
Both have their challenges. Price competition is fierce for their most important product, high-end TVs. And sales of compact discs have been falling.
But initiatives Best Buy started a few years ago, such as its international operation, its Geek Squad tech-support service and store sections that cater to big-spending customers, are helping offset profit pressures in its core electronics business.
Meanwhile Circuit City has said it will close 62 company-owned stores in Canada.
