Best Buy Says Theft is a Reason for Profit Decline as Organized Robberies Increase in U.S.

Following the latest incident in a national trend of smash-and-grab thefts, Best Buy CEO Corie Barry said organized theft was one of the factors negatively affecting the company's bottom line.

Monday night, a group of thieves targeted a Nordstrom at The Grove shopping center in Los Angeles, smashing the store's window displays and grabbing as much merchandise as they could before fleeing the scene.

The Associated Press reported that Los Angeles Police Department officers chased an SUV, eventually taking three people into custody.

The Grove incident follows similar thefts in places like San Francisco, Beverly Hills and a Chicago suburb.

A recent survey by the National Retail Federation showed that many stores are seeing an increase in organized thefts as well as increased aggression by the perpetrators.

Electronics chain Best Buy cited the increase in thefts as one of the reasons for a decline in gross profit margin in the third quarter. Barry told reporters that the company is seeing thefts increase across the country, but especially in San Francisco.

"We are definitely seeing more and more particularly organized retail crime and incidents of shrink in our locations," Barry told analysts during a conference call Tuesday. "This is a real issue that hurts and scares real people."

For more reporting from the Associated Press, see below.

San Francisco, Louis Vuitton, theft
Groups of thieves, some carrying crowbars and hammers, smashed glass cases and window displays, ransacking high-end stores throughout the San Francisco Bay Area, stealing jewelry, sunglasses, suitcases and other merchandise before fleeing in waiting cars during a weekend of brazen organized theft that shocked holiday shoppers and prompted concerns about the busy retail season. Above, police officers and emergency crews park outside the Louis Vuitton store in San Francisco's Union Square on November 21, 2021, after looters ransacked businesses. Danielle Echeverria/San Francisco Chronicle via AP, File

Groups of thieves, some carrying crowbars and hammers, smashed glass cases and window displays and ransacked high-end stores in brazen organized theft throughout the Bay Area, stealing jewelry, sunglasses, suitcases and other merchandise before fleeing in waiting cars.

The thefts are believed to be part of sophisticated criminal networks that recruit mainly young people to steal merchandise in stores throughout the country and then sell it in online marketplaces. Experts and law enforcement officials say the thefts are ratcheting up as the holiday shopping season gets underway.

Barry said Best Buy is hiring security guards and working with its vendors on creative ways to stage the product.

Yet loss prevention agents and security guards are generally trained not to engage with thieves, said mall and retail security expert David Levenberg. They are not trained or equipped to pursue or subdue suspects and the likelihood of violence is too great; instead they are supposed to "observe and report."

"The value of the merchandise is not worth somebody being injured or killed," he said.

The weekend robberies started in San Francisco on Friday around 8 p.m., when packs of people broke into stores including Louis Vuitton, Burberry and Bloomingdale's in the downtown area and in Union Square, a posh shopping district popular with tourists that was teeming with holiday shoppers.

Videos of the chaotic scene posted on social media by witnesses showed police officers dragging one suspect from a waiting car and people running with merchandise in their arms or dragging suitcases.

The flash mobs are usually organized by local people who recruit their crews and send them to steal specific merchandise requested by criminal organizations throughout the country, said Ben Dugan, president of the Coalition of Law Enforcement and Retail.

Those who do the stealing get paid between $500 and $1,000 to take as much as they can and bring it back to organizers who ship it to other parts of the country.

"Crew bosses organize them, they'll give him the crowbars, and in some cases even rent them cars, or provide them with escape routes or a list of products to actually go out and steal. It looks very chaotic but it's actually very well organized," Dugan said.

"We're not talking about someone who needs money or needs food. These are people who go out and do this is for high profit, and for the thrill," he said.

And while smash-and-grab thefts are occurring nationwide, Levenberg said cities with progressive prosecutors—like Los Angeles and San Francisco—are especially hard-hit because the consequences for perpetrators are not as harsh as in other cities.

"The consequences are minimal and the profits are substantial," said Levenberg, founder of Florida-based Center Security Services.

California Governor Gavin Newsom said Monday that his office met with retailers over the weekend who asked for more police patrols.

He said increased enforcement would start immediately "in and around areas that are highly trafficked and coming into the holiday season Black Friday in shopping malls."

Retailers lose about $65 billion each year to organized theft, the bulk stolen by professional thieves, Dugan said.

Last week, 14 suspects went into a Louis Vuitton store in Oak Brook, a Chicago suburb, pulled large plastic bags from their coats and filled them with clothing and other items, stealing more than $120,000 in merchandise, police said.

The Grove, Los Angeles
A Nordstrom at The Grove is the most recent victim in a string of retail robberies across the country. Above, a view of deserted outdoor mall The Grove on April 7, 2020, in Los Angeles.