Approximately two years after acquiring Musicland for $685 million, Best Buy Co. has put the retailer up for sale. Best Buy CEO Brad Anderson said the decision to divest Musicland came after a strategic review by Best Buy executives determined that the unit's financial results would not meet company expectations.
Musicland's sales fell 8% in 2002, to $1.7 billion, and it had an operating loss of $72 million. The poor performance was attributed to the steady decline in CD sales, as well as to a slowdown in customer traffic in shopping centers. Best Buy had expected Musicland to boost results by selling more consumer electronic products, and those sales never materialized.
The Musicland group includes Media Play, whose 76 stores carry books as well as other entertainment products, and 231 Sam Goody, formerly On Cue, stores located in rural areas whose product mix also includes books. The larger 505 Sam Goody stores do not feature books nor do the company's Suncoast stores.