Best Buy Corporate Takes Over Magnolia Leadership

Best Buy's corporate operations are taking over its specialty electronics chain Magnolia Audio Video.

The big-box retailer will continue to operate its store-within-a-store Magnolia locations, but seven of the 13 stand-alone stores along with Magnolia's headquarters and distribution center in Kent, Wash. have closed, according to the Seattle Post Intelligencer.

The move means 184 jobs will be cut from a 345-person workforce, according to Best Buy spokesperson Sue Busch Nehring.

Best Buy acquired Magnolia Hi-Fi in 2000 and changed its name to Magnolia Audio Video in 2003.

Best Buy maintained separate leadership for Magnolia until now, apparently acknowledging the vast differences between serving mainstream electronics consumers and specialty consumers.

The move to roll Magnolia's leadership into Best Buy's Richfield, Minn.-based headquarters is aimed at making the specialty division more efficient and profitable, according to a company spokesperson.

Shifting specialty chains to big-box leadership isn't necessarily a formula for success. As Tweeter, another specialty chain, grew to nearly 200 stores, the decision was made to bring in big-box leadership — including a consultant group led by Best Buy veterans.

Although the jury is still out on what led Tweeter to its Dec. 2007 Chapter 7 bankruptcy, many blame a corporate focus shift from the specialty to mainstream market.

Best Buy says it will remain focused on building the Magnolia brand. Best Buy intends to carry out plan to open a Chicago area store and realign its West Coast custom installation divisions, according to a company spokesperson.