TEXT-S&P puts Best Buy ratings on watch negative

April 4 - Overview
-- U.S. consumer electronics retailer Best Buy plans to shrink its large
big box store base and replace it with smaller-format stores and reduce costs
by $800 million over the next five years, with $250 million occurring in the
current fiscal year.
-- In our view, these actions underscore that its current business model
is not working and that the steps taken to date have not been enough to
improve performance.
-- We are placing the 'BBB-' corporate credit rating on CreditWatch with
negative implications.
-- In resolving the CreditWatch listing, we will focus on the changing
industry dynamics, our view of the company's position and its ability to
improve its business model, and how that will affect our overall assessment of
the company's credit profile.

Rating Action
On April 4, 2012, Standard & Poor's Ratings Services placed its 'BBB-'
corporate credit rating and other ratings on Richfield, Minn.-based Best Buy
Co. Inc. on CreditWatch with negative implications.

Rationale
The CreditWatch placement follows Best Buy's announcement of its
fourth-quarter and full-year results, its planned closure of 50 U.S.-based big
box stores, the opening of 100 U.S.-based small format stores in the U.S., and
$800 million of cost reductions over the next five years, with $250 million
occurring in the current fiscal year ending Jan. 31, 2013. We believe the
restructuring of operations underscores the problems that Best Buy is having
with its current business model. Currently, we assess the company's business
risk profile as "satisfactory" and its financial risk profile as "moderate."
In our view, key factors in our overall assessment of the company's credit
risk profile are the changing dynamics of the consumer electronics industry,
how quickly the company can adjust its retail model to the changing industry
trends, and the resulting effect on its overall credit profile.

CreditWatch
We expect to resolve the CreditWatch listing in the near term, after
discussions with management about their business strategy, cost reduction and
growth initiatives, and its implications for the company's financial risk
profile, credit metrics, and financial policies. Our analysis will focus on
our assessment of the secular changes in the industry and Best Buy's ability
to adapt its model to those changes.

Related Criteria And Research
-- Use Of CreditWatch And Outlooks, Sept. 14, 2009
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

Ratings List
Ratings Placed On CreditWatch
To From
Best Buy Co. Inc.
Corporate Credit Rating BBB-/Watch Neg/-- BBB-/Stable/--
Senior Unsecured BBB-/Watch Neg BBB-
Subordinated BB+/Watch Neg BB+

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.