Best Buy (NYSE:
) has been shedding executives like leaves in fall, but it still
must have come as something of a shock to the top brass when
Richard Schulze resigned from his position on the
on Thursday, stating on his way out that he may sell his recently
disclosed 20.1% stake in the retailer.
CEOs come and go, but when one of the company's founders, the
people who put their heart and soul into building the business,
decides to jump ship (albeit at the age of 71), then that really
should be a wake up call.
"I continue to believe in Best Buy and its future--and care
deeply about its customers, employees and shareholders," Schulze
said as he left. "There is an urgent need for Best Buy to
reinvigorate growth by reconnecting with today's customers and
building pathways to the next generation of consumers."
So the big question is, what happens next? There are rumors
swiftly gathering pace that Schulze is contemplating a takeover,
which is at least plausible if he is unhappy at the way the
company has been managed overall, feeling that he didn't have
enough authority. Some analysts believe that Schulze was angry
having lost control of the board, in the wake of allegations that
he failed to notify the board about the alleged inappropriate
behavior of former CEO Brian Dunn.
In the shorter term though, how does a company replace a
founder? There will certainly be a battle for power now. A
company spokesman, Bruce Hight, said, "We don't know what
(Schulze's announcement) means, but I guess we'll find out. We
certainly appreciate his past contributions, which were immense.
But the company's going to proceed forward with plans that it has
Those plans will include developing a new strategy to turn the
business around and, immediately, installing a new CEO. Schulze
had already been replaced as chairman by Hatim Tyabji.
If Schulze does want to take over completely, he will face a
tough task convincing investors, as he will have to pay
significantly more than the $6 billion valuation. One
representative said that they would sell for between $9 billion
and $12 billion, but there are major doubts that Schulze could
raise that amount.
The biggest problem Schulze faces is that investors will be
wary of his involvement after the debacle of the last year.
On Friday, BBY was down 0.19 cents, or 0.96%, at $19.70.
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