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Best Buy shares are down again after S&P put the company’s debt on credit watch negative.This follows last week’s earnings announcement in which management announced it would lay off 400 employees and shutter 50 stores.
From S&P’s press release:
NEW YORK (Standard & Poor’s) April 4, 2012–Standard & Poor’s Ratings Services placed its ‘BBB-‘ corporate credit rating and other ratings on Richfield, Minn.-based Best Buy Co. Inc. on CreditWatch with negative implications.
The CreditWatch placement follows Best Buy’s announcement of its fourth-quarter and full-year results, its planned closure of 50 U.S.-based big box stores, the opening of 100 U.S.-based small format stores in the U.S., and $800 million of cost reductions over the next five years, with $250 million occurring in the current fiscal year ending Jan. 31, 2013.
“We believe the restructuring of operations underscores the problems that Best Buy is having with its current business model,” said Standard & Poor’s credit analyst Jayne Ross.