Target cuts blu-ray player prices, has first $229 Player

[jw]

Good News!!! Once the competition gets wind of this it may start an epicdemic..lol

By Erik Gruenwedel | Posted: 14 Oct 2008


Target Corp. has begun selling Blu-ray Disc players at $229, establishing the big box retailer among the most aggressive to push the high-definition packaged media format entering the fourth quarter.

The Minneapolis-based retailer, which reportedly sells 25% of all packaged media, is exclusively offering the Olevia BD-110 Profile 1.1 (Bonus View) player for $229 — a price that rivals proprietary Insignia brand Profile 1.1 player from Best Buy.

Target also is selling the Philips BD-P7200 Profile 1.1 player for $249.99 — $100 below the suggested retail price.

The price reductions appear to be a reflection of the lack of available credit to banks and other financial institutions due to the global economic crisis that has many consumer credit cards companies scaling back credit limits and increasing interest rates.

Indeed, lower monthly limits and higher interest rates discourage consumption, which is not a good thing for CE retail entering the holiday season, analysts say.

Target, which generated $460 million in Target credit card finance charges and late fees in the most recent quarter, also reported $260 million in card write-offs — up from $95 million during the previous-year period.

“Challenges in the current environment, including weak top-line growth in our retail segment and higher net write-off rates in our credit card segment, have increased the likelihood that our third quarter [earnings] may be slightly lower,” Target CEO Gregg Steinhafel said in a statement.

Stacey Widlitz, with Pali Research in New York, said she estimates 80% of all TVs and related CE purchases are on credit, and any pullback in monthly credit limits by card companies could spell trouble for CE retailers.

“If things do not change quickly, we are concerned all credit card companies will put lower monthly dollar limits in place,” Widlitz said in a research note.

Consulting firm Innovest StrategicValue Advisors reported that banks would write off nearly $96 billion in credit card debt in 2009, double the projected 2008 losses.

Bill Hardekopf with LowCards.com said with card companies unable to legally suspend accounts and demand full payment, they can increase interest rates and lower credit limits without notice.more