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Stock Market News: Best Buy CEO Quits; Here's What the Next Leader Needs to Do (NYSE: BBY)
Former Best Buy Co Inc. (NYSE: BBY) CEO Brian Dunn resigned from the struggling electronics giant after just three years at the helm, the company announced yesterday (Tuesday), and just two weeks after announcing a major restructuring plan.
According to Bloomberg News there was "no disagreement on any matters relating to operations, financial controls, policies or procedures." Dunn's departure was "part of a mutual agreement of the necessity to address the challenges that face the company."
Dunn was with the company for 28 years, starting as a store assistant. Board member G. Mike Mikan will take over as interim chief executive.
Despite Dunn's decades-long commitment to the company, he might not have had what's needed to dig Best Buy out of the hole into which it's sinking. The ailing retailer is in the midst of revamping its stores and overhauling its business model, attempting to attract customers - and more importantly, get them to buy.
"[Dunn] grew up in the store. His specialty is the stores," Stacy Widlitz of SW Retail Advisors told The Financial Times. "Was he the right guy for the chief executive? In this environment he was probably not the ideal candidate."
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Retail Stocks: Best Buy (NYSE: BBY) Not a Good "Buy" At All
After years of slipping sales and struggling performance among retail stocks, Best Buy Co Inc. (NYSE: BBY) has decided to revamp -- a long overdue move to hold on to customers and investors.
Best Buy announced today (Thursday) that it would close 50 stores and redesign its big box business model to compete with online retailers.
Best Buy, the world's largest consumer electronics retailer, has suffered six straight quarterly sales declines at stores open at least 14 months. It also reported Thursday a fourth-quarter loss of $1.7 billion.
The news triggered Best Buy shares to slide almost 10% in early morning trading.
Best Buy's initiative to finally update its business model and adapt to a changed retailing landscape could be too late to salvage sinking investor confidence, signaled by today's selloff.
"We are concerned that a turnaround of this magnitude will further weaken Best Buy and increasingly distance it from its vendor partners and core customers in an already very precarious environment," Oppenheimer analyst Brian Nagel told MarketWatch.
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