CompUSA Closing - One Less Competitor for Best Buy (BBY)

I continue to search weekly on terms "job loss" and "job cuts" on Google News, with a 1 week time frame (example here) to see what is really going on in the economy instead of relying on fantasy land government statistics / models. The news is increasingly getting bad and hitting many diverse areas of the economy (I have been surprised to see so many cuts in big pharma)

Anyhow, the WSJ reports that the last of about 100 CompUSA stores will be closing after the holidays. Figure (very conservative) 40-50 employees at each plus corporate headquarters jobs (accountants, HR folks, etc) and this is probably in excess of 5000 jobs lost. Could be much higher, I don't know. But the good news is we keep creating bartender jobs to replace this in our ever expanding wonderous service economy. Some of these stores might be taken over by competitors but these are leading edge stories you see in the beginning of a recession; before even faulty government reports show slowdown.

This should be a net positive for Best Buy (BBY) in the long run, although that investment is more of a Christmas play for me... Circuit City is barely a competitor (in spirit only with all the terrible management decisions). Actually in many ways it appears Walmart (WMT) of all people might be more of a direct competitor (not in quantity of merchadise but simply on costs)

Shows you even some of the richest men in the world make serious errors in judgement, although for Carlos Slim this 'write off' will probably just be a rounding error into his net worth.

• Mexican telephone and retail magnate Carlos Slim, in a rare defeat, will exit the U.S. consumer electronics market, shutting the last 100 CompUSA Inc. stores after sinking about $2 billion into the business.
• Stores will remain open through year-end under the supervision of Gordon Brothers, which will also negotiate the sale of real estate and other assets.
• CompUSA did an estimated $4 billion in annual sales last year, but with store closures in February, sales were expected to shrink to about $1.5 billion this year, according to industry executives. The business has not been recently profitable, they said.
• The retailer has struggled for years, hurt first by competition from direct personal computer sellers such as Dell Inc. and more recently by intense competition in consumer electronics. Bigger rivals such Best Buy Inc. and Wal-Mart Stores Inc. have been able to offer greater selection and lower prices for flat-panel televisions and other consumer electronics gear.

I think this also begins to speak to the over saturation of retail in this country. I believe by human right we need to have CVS every 2 miles, a mall every 7 miles, strip malls every 3 miles, and the same retailers crowded into all these niches. Do we really need all these stores? Even if you argue yes, is there much room for growth for established players anymore? I remember driving last winter on vacation down from LA to San Diego and in southern LA there is literally almost the same mall at one exit, and then not 6 exits later the same stores. I realize these are 'growing parts' of the country as people move from the Midwest to sun belt, but really - can't we drive 6 miles to get to Sears? I am thinking out loud if we do get a consumer retrenchment over the next few years if we start seeing some store closing in over saturated areas. By retrenchment I don't mean consumers drop spending by 10% - but even if they slow to -2% to +2% this is way below recent trends.

Long Best Buy in fund; no personal position