Block City? Circuit Buster?

A lot of Blockbuster in the news recently.
Blockbuster Inc yesterday said it has offered up to $1.3 billion for Circuit City Stores Inc. (offering $6 to $8 per share compared to CC's current stock price of $3.90.) Blockbuster is touting the move as a strategic combination of retailers focused on electronics and digital media.
Investors and technology pundits are critical of the move. Blockbuster's reasoning behind the combination of the two companies is not immediately apparent to many. It is clear new Blockbuster CEO Jim Keyes is determined in his intent on making Blockbuster a more retail-focused business as it faces increased competition from alternate forms of delivery of entertainment content.
"The combination of Blockbuster and Circuit City will result in an $18 billion retail enterprise uniquely positioned for the convergence of media content and electronic devices. We would seek to differentiate products in both Blockbuster and Circuit City stores by offering exclusive content and content-enabled devices" Keyes said in a public letter to Circuit City's Philip Schoonover.
Many don't remember that Blockbuster tried to integrate Radio Shack into it's stores at the beginning of the decade. The 'store within a store' concept didn't expand beyond the initial 130 test stores as Blockbuster abandoned the move 10 months later. Of course, just how Keyes specifically intends to integrate the companies is not known and Blockbuster undoubtedly learned what did and didn't work from the Radio Shack test.
Whether there will be little Circuit Citys inside Blockbuster or little Blockbusters inside Circuit City stores, an unknown integration of the two, or if this deal even goes through remains to be seen.

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