Best Buy to open 4 stores in Md., 2 in Howard Co.

September 01, 1994|By Matt Ebnet | Matt Ebnet,Sun Staff Writer

Stepping into the electronic superstore fight between Circuit City and Luskin's, Minneapolis-based Best Buy Co. will open four warehouse-style stores in Maryland this fall, two of them in Howard County.

Best Buy, the nation's No. 3 consumer electronics chain, will open two stores about eight miles apart in Columbia and Laurel, hoping to capitalize on what analysts say is one of the wealthiest counties in the United States.

"We'd like to open six more in that area right now, but the real estate just hasn't come through yet," George Fouts, senior vice president of the company, said.

Company officials say they will bring their store total to nine in the Washington-Baltimore area by next year. The other stores in Maryland will be in Gaithersburg and Glen Burnie.

Although Best Buy and Circuit City Stores Inc., based in Richmond, Va., are rapidly adding stores in each others' territories, Circuit City spokesman Paul Rakov said his company won't alter its plans because of Best Buy's expansion.

"We've had many stores here for quite some time and . . . we believe we have the advantage," he said.

Mr. Rakov also said Circuit City does plan to open 60 new stores a year, saturating every metropolitan market in the United States. In Best Buy's territory, Minneapolis-St. Paul, Circuit City soon will have seven stores, compared with Best Buy's 11, Mr. Rakov said.

The competition should be good for Howard County residents.

Like Circuit City, the nation's largest consumer electronics chain, Best Buy sells videocassette recorders, compact disc players, tape decks and televisions. But Circuit City focuses more on home appliances, and Best Buy sells more computers.

One way Best Buy attracts customers is by offering items such as compact discs at low prices. Also, the 45,000-square-foot stores in Maryland will have about 70 listening kiosks, where shoppers can listen to the discs before buying.

Best Buy had $3.01 billion in sales in its most recent fiscal year. Circuit City had $4.13 billion. Tandy Corp., whose Radio Shack stores focus on electronic components and small appliances, is the No. 2 U.S. electronics chain, with $4.10 billion in sales last year.

Kenneth Gassman Jr., a retail analyst with Davenport Co., a Richmond-based brokerage, said Best Buy could emerge the winner.

"They are coming in with much, much more square footage in their stores and splashy ads and low prices," he said. "They could very well be the biggest, in terms of sales volume, within two years."

Of locally owned Luskin's, Mr. Gassman said, "In a three-way contest, Best Buy and Circuit City will be victorious."

Mr. Fouts, senior vice president of the company, said Best Buy's success is based on its sales strategy, not the number of stores.

Best Buy has fewer employees per store, and salespeople are on straight salary. Circuit City offers full-service stores staffed by commissioned salespeople.

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