Either the market does not believe that Best Buy’s (NYSE: BBY) new CEO Hubert Joly, former head of hotel operator Carlson, can turn the consumer electronics retailer around, or fears have grown that founder Richard Schulze will withdraw his offer to take the firm private. One or both of these concerns drove shares down 7% early today to $18.80
Joly does come from the hospitality industry, which reasonably raises the question of his qualifications. Couldn’t Best Buy find a major retail executive?
Best Buy’s board has been sparring with Schulze over due diligence parameters. The two are deadlocked for the time being, which means his offer may not proceed.
The market also realizes that who manages Best Buy may not matter. It has more than 160,000 workers and thousands of stores. Its e-commerce foot print is small compared to Amazon.com Inc.’s (NASDAQ: AMZN). And all big-box retailers, including Wal-Mart (NYSE: WMT) and Costco (NASDAQ: COST), have consumer electronics departments of their own.
Douglas A. McIntyre