Best Buy consolidates stores in Canada

J.P. Morgan analyst Christopher Horvers wrote an update to his Best Buy coverage after the company announced it would unify store brands it runs in Canada. Best Buy had operated 131 Future Shop stores in Canada but on March 28 announced it would close 66 of those stores and rename 65 stores under the Best Buy name.

“Future Shop operated as its own brand with its own field and merchandising operations,” Horvers wrote. “Thus, the explicit cost savings are beyond payroll and rent.” Horvers is estimating that Best Buy will save $150 million in 2015: $46 million from overhead, $34 million from rent, $51 million from payroll and $19 million as a result of switching Future Shop’s commissioned sales force to Best Buy’s noncommissioned model.

Horvers is maintaining his “overweight” rating on Best Buy and wrote one of the key reasons was “the Canada announcement clearly demonstrates the significant operational improvements the management team is making.”

Patrick Kennedy

Deal consistent with UnitedHealth strategy

Deutsche Bank analyst Scott Fidel issued a quick research note after UnitedHealth Group announced its $12.8 billion acquisition offer for Catamaran. Fidel wrote the deal was consistent with UnitedHealth’s stated mergers and acquisition strategy to help build its pharmacy benefit management business OptumRx. “UNH has emphasized for some time now that the M&A strategy would be focused on accelerating Optum’s capabilities rather than on acquiring traditional managed care assets.”

Patrick Kennedy

Executive transition complete at Evine

On March 26, Evine Live announced the departure of two executives and the appointment of Tim Peterman as chief financial officer. Departing are Bill McGrath, who had been CFO since August 2010, and Bob Ayd, president since February 2012.

Mark Smith, who covers Evine Live for Minneapolis-based Feltl and Company, wrote a note the next day saying the changes are the last steps in the company’s transition after last year’s proxy fight that turned over the board of directors and put Mark Bozek in charge as CEO.

Smith felt the time had come for the last steps in Evine’s transition but gave the departing execs their due. “We note that Mr. McGrath and Mr. Ayd were the last holdouts from the old management team,” Smith wrote. “We think they were kept in their positions because of the value they added, but think the new changes make the transformation complete. ”

Smith maintained his “buy” rating on Evine Live and his $8 price target.

Patrick Kennedy