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That’s obviously a big fleet of warehouses. But of course Best Buy has a big fleet of stores, too, at more than 40 million square feet in the United States.
Rubinson calculates its sales per square foot(print) at $667, behind only the video game retailer GameStop and Amazon.com in his ranking of two dozen companies.
“They certainly got great sales productivity,” Rubinson said of Best Buy. “They’ve got plenty of dollars to make it work.”
The recent trend by this measure has not been that encouraging, however: The same figure for Best Buy’s U.S. business two years ago was $676. Since then sales have slipped while the total selling space hasn’t contracted by as much, although the company is down one warehouse since then.
Because Rubinson is really trying to capture the impact of e-commerce sales, his results for Best Buy masked some of the progress Best Buy has made in its e-commerce business. BestBuy.com has expanded its share of the online consumer electronics market from 7.3 percent in 2010 to 10.1 percent in the first quarter of this year, as tracked by the investment research firm Morgan Stanley.
Rubinson has a neutral rating on Best Buy’s stock, and it should be pointed out that he’s not suggesting that his new way of looking at retailers is the one true measure of retailing performance. His firm is known for unconventional ways to look at retailers, and he’s not advising clients to dump any investments based on this one.
On the other hand, he certainly finds his new metric, sales per square foot(print), meaningful, and he intends to keep calculating it.
“We study about 450 lines on our income statement model,” Rubinson said. “What’s the harm in putting in one more?”