J.C. Penney Company, Inc. (JCP), Best Buy Co., Inc. (BBY): Is Retail Inception a Dream or Nightmare?

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There is also the issue of different age groups. This problem is now being shown at J.C. Penney where some of the individual shops geared towards teenagers have turned away the older customer base that prefers the old J.C. Penney model. The win-win situation, therefore, is more of an ideal than a reality. Is Best Buy Co., Inc. (NYSE:BBY) benefiting equally to Microsoft Corporation (NASDAQ:MSFT), Samsung, or Apple Inc. (NASDAQ:AAPL)? If you glance at the earnings reports, it looks like the latter three companies are experiencing much of the success at the cost of Best Buy.

Lastly, the store-within-a-store model works for places like gas stations and supermarkets because of the economics involved. The supermarket is already profitable and renting off some space for the local bank is just an added bonus for the supermarket’s customers. The model typically fails for electronics-based establishments due to many options for which consumers can buy the same product elsewhere. It also fails because the transformation mostly occurs as a last resort to save the company. Overall, Best Buy Co., Inc. (NYSE:BBY) looks like it is surrendering its old self, similar to J.C. Penney, and handing over parts of the store for another company to make better use of it.

Michael Carter has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

The article Is Retail Inception a Dream or Nightmare? originally appeared on Fool.com.

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