In this photo illustration a Best Buy logo appears on a smartphone with the stock exchange … [+]
Taylor Swift is killing it. The pop music sensation is expanding her brand beyond music to films and fun experiences. Retailers call it funflation, and they worry that consumers will cut back on spending on the products they sell.
Investors should avoid electronics retailers like Best buy
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Taylor Swift transcends boundaries in a way few artists have been able to. His concerts regularly sell out within minutes. Her fans, who call themselves Swifties, often pay up to $1,000 per ticket for live shows, then stream endlessly on TikTok wearing elaborate costumes and officially licensed Swiftie gear.
Swift’s Eras Tour kicked off in March in Glendale, Arizona. Forbes notes that ticket and merchandise sales from the 53-stop tour are expected to bring in well over $1 billion in revenue, a record.
“Taylor Swift: The Eras Tour” was filmed in August over four sold-out nights at SoFi Stadium in Inglewood, California. AMC Theaters (AMC) announced in August that ticket pre-sales for the film had reached $26 million. And after its October release, studio executives and AMC officials estimate the film grossed $97 million, according to one report. report In Variety.
Swift’s appeal lies in fun experiences rather than materialism. That last part worries bad retailers.
They have been struggling since 2021, when the pandemic trapped billions of consumers at home. It was then easy to sell smartphone upgrades, flat-screen TVs and audio systems. Bad retailers fear that those days are gone for good.
Corie Barry, CEO of Best Buy, was at Fortune’s Most Powerful Women summit last week, and her message was dark. Barry says consumers don’t skimp when it comes to paying for fun experiences. They buy costumes, throw parties and rent hotels. They transform concerts and cinema screenings into an event in their own right.
Global live music sales have reached $25.3 billion so far in 2023, according to a study. note for Bank of America
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Executives at bad retailers blame this shift toward fun experiences for their woes. It’s not that.
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Barry reported in July that second-quarter financial results fell across the board, year over year. Revenue fell 7.2% to $9.5 billion. Profits fell 10.4% to just $274 million. Even more worrying, net cash decreased to $59 million, a staggering 69.3% decline.
Best Buy isn’t failing because of Taylor Swift or funflation. The business is stagnating. Leadership does not evolve with the times and adopt new forms of marketing, such as influencers. The company will release its quarterly results on November 21. In the meantime, investors should act decisively to reduce their exposure.
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