BusinessInsider: 10 Brands that will Disappear in 2010
Best Buy has no way of replicating the exponential boost to revenues and earnings that acquiring Radio Shack would provide. It is not a function of simply opening stores next door to Radio Shack. First, BBY would have to compete head on with RSH for the same customer, eroding sales and earnings. Second, BBY has no chance of securing leases in almost 5000 of the malls where RSH operates. Third, geeky or not, millions of people still choose to shop at the Shack. These customers would become BBY customers, giving BBY the critical mass to compete with WMT. Finally, RSH generates tons of free cash flow, and with almost a billion dollars of cash on the books, it makes an acquisition accretive to earnings almost immediately.