“Best Buy Co founder and largest shareholder Richard Schulze abruptly resigned as chairman and a director of the company on Thursday and said he was exploring options for his 20% stake, creating more uncertainty about the future of the beleaguered electronics retailer,” Ann Zimmerman reports for The Wall Street Journal. “Mr. Schulze, 71, said he was immediately leaving the company he had founded more than four decades ago. His sudden departure, and expressed interest in putting his 69 million shares valued at $1.36 billion in play, raised the possibility that Best Buy could become a takeover target.”
“‘This is just more drama and distraction for a company that needs a lot of focus right now,’ said Colin McGranahan, retail analyst at Sanford Bernstein. He characterized Mr. Schulze’s declaration as the equivalent of holding a ‘fire sale on the company’s front steps,'” Zimmerman reports. “The Richfield, Minn. retailer previously had said that Mr. Schulze would step down as chairman June 21 and leave the board in 2013 after an internal investigation found that he had learned of an alleged affair involving former Chief Executive Brian Dunn and a 29-year-old subordinate, but failed to notify other members of the board. Mr. Dunn resigned before the internal investigation was completed. Another board member, G. “Mike” Mikan, a former healthcare executive, is acting CEO until a search committee settles on a new leader.”
Zimmerman reports, “The drama comes amid an already rocky time for the world’s largest electronics retailer by revenue, which has been struggling to re-imagine its business model amid increasing competition from online retailers such as Amazon.com Inc. and the trendy gadget stores of Apple Inc. Best Buy has been one of the retailers hardest hit by showrooming, the consumer practice of checking out merchandise in stores, then buying it online. Best Buy named board member Hatim Tyabji its new chairman on Thursday and released a statement calling Mr. Schulze ‘an iconic entrepreneur’ who ‘changed the landscape of American retail.’ It declined to discuss the matter further.”
Read more in the full article here.
MacDailyNews Take: Showrooming, sure, but it also doesn’t help that Best Buy’s customer service sucks donkey you-know-what or that their collection of blue-shirted morons — who mostly stand around in groups yakking with each other while ignoring customers — know next-to-nothing about most of the products they sell.
Best Buy CEO Brian Dunn call it quits – April 10, 2012
Best Buy posts $1.7b loss, to close 50 U.S. stores, cuts 400 corporate-level jobs – March 29, 2012
Best Buy forces customer to buy service plan to get an iPad 2 out of storage – April 11, 2011