Best Buy Chooses Turnaround Specialist As New CEO
Electronics retailer Best Buy has chosen a new chief executive as it grapples with lagging sales and a proposal to take the company private by its founder.
Hubert Joly has stepped down as CEO of hospitality and restaurant giant Carlson to lead the struggling electronics giant, Best Buy announced Monday morning. Word of the impending appointment was first reported on by the Wall Street Journal on Sunday evening. Best Buy touted Joly as having a record turning around companies in the media, technology and services sectors.
“Hubert’s range and depth of experience in transforming companies is exactly what the company needs at the moment, as is his energetic, imaginative and experienced leadership in executing strategies,” said Hatim Tyabji, chairman of the Best Buy board, in a statement.
Best Buy touted Joly’s experience in leading Vivendi’s video games business and the integration of Universal and Vivendi’s media assets in the U.S., as well as the turnaround of EDS in France.
Joly, who is French, is expected to assume his new roles, as both CEO and president, in early September once he secures a visa, Best Buy said.
The appointment comes on the heels of a proposal by Best Buy founder and ousted chairman Richard Schulze to acquire the brick-and-mortar retailer and take it private. Schulze, who already owns about 20 percent of Best Buy, has proposed paying between $24 and $26 per share in cash to the company to acquire the outstanding shares he doesn’t own — a premium of 36 percent to 47 percent on its Friday closing price of $17.64.
Schulze, who founded Best Buy in 1966 and served as the company’s CEO until 2002, gotcaught up in a scandal involving former CEO Brian Dunn earlier this year. A Best Buy investigation found that Dunn had engaged in an “extremely close personal relationship with a female employee that negatively impacted the work environment.”
After that relationship was discovered, Dunn was asked to resign as chairman. During its investigation, the audit committee found that Schulze had learned of the relationship but didn’t inform anyone, prompting the board to ask him to step down.
With more than 1,400 stores, the company has been struggling to compete with online retailers. For the previous fiscal year, the Richfield, Minn.-based company posted a loss of $1.2 billion for its last fiscal year, which ended March 31, compared with a $1.3 billion profit for the previous year.