Circuit City Once Had A Chance To Purchase Best Buy, But Passed It Up
In Wurtzel's new book "Good to Great to Gone," which hits bookstores on Tuesday, he shares an interesting little anecdote in a section discussing the rise of Circuit City's archrival Best Buy.
Wurtzel says he "knows for a fact" that Best Buy founder Richard Schulze tried to sell his stores to Circuit City back in 1988.
But in the end, they couldn't come to an agreement. Circuit City passed.
Wurtzel writes in his book:
At the time, [then-CEO Rick] Sharp's view was that it was not necessary to spend $30 million when all Circuit City had to do was open a store in Minneapolis and 'blow them away.' And there were also other issues, including a role for Schulze on the Circuit City board and the large amount of Circuit City stock he would have owned. In hindsight, had Circuit City acquired Best Buy for $30 million in stock or cash, it would have been the best money we ever spent. At the least, it would have eliminated a future competitor.
That's not all. There's another rumor about a Best Buy sale in the 80s.
"Rumor had it that, as Best Buy limped into the fall of 1988, Schulze tried to sell his company to Sears and failed because of his demands for certain perks," said an anonymous Minnesota writer quoted in Wurtzel's book.