While Circuit City (NYSE:CC) and Blockbuster (NYSE:BBI) try to rekindle the magic of their respective retailing heydays, archrival Best Buy (NYSE:BBY) continues to make it look easy by consolidating market share into its own hands. Given the dire first-quarter trends that came out of Circuit City yesterday, combining with Blockbuster may be its best shot at survival.

On Monday, Best Buy announced a respectable quarter that saw sales, earnings, and same-store sales all increase. As fellow Fool Anders Bylund pointed out, Best Buy has mastered the ways of successful customer service and stocking plenty of hot-selling consumer electronics, including Apple (NASDAQ:AAPL) and Dell (NASDAQ:DELL) store-in-store displays to supplement its impressive array of flat-panel televisions, video games, and laptops.

In stark contrast, the best Circuit City could muster was that third-party mystery shopper scores had improved, and it is focused on "creating a good first and last impression with the customer." Still, total first-quarter sales fell 7.4% as earnings fell deeper into negative territory and cash on hand fell 75% to $92.2 million. As a result, management is moving into capital-preservation mode and cutting its dividend going forward.

So why would Blockbuster possibly want to acquire an embattled Circuit City? Well, in the words of Blockbuster management, it sees plenty of potential in "the growing convergence of media content and electronic devices," and there is definite appeal in electronics retailing, as Best Buy and well-managed regional rivals such as CONN'S (NASDAQ:CONN) and hhgregg (NYSE:HGG) can attest to. Unfortunately for shareholders, Circuit City lost its way some time ago, but there are still entities that see its potential and are looking to save it from the has-been bin.  

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