One of the more interesting companies to watch in 2013 is Best Buy (BBY), and the show started right from the get-go in 2013. As most people were getting ready to enjoy New Year’s Eve celebrations, this struggling retailer was busy confirming that two key board members were resigning, Reuters reported. Among those leaving Best Buy’s board of directors is G. Mike Mikan, who served as interim CEO between April and September this year after former CEO Brian Dunn resigned amid scandal. Director Matthew Paull is the second departure, and he is leaving in April following his retirement from the role of chief financial officer at McDonald’s in April 2008. Best Buy’s corporate policy indicates that directors must relinquish their board seats within five years of retiring from their primary careers. The struggling nationwide retailer now has four vacant seats on its board.
Reports surfaced last month that Best Buy (BBY) founder and former CEO Richard Schulze, who is trying to buy his former company, had asked the retailer for an extra 30 days to conduct due diligence before decided whether to make a bid. Schulze was said to be working with three private-equity firms to offer a more appealing proposal to the company and had also been interested to see how Best Buy performed over the holiday season. The retailer announced on Friday, however, that it has agreed to extend the founder’s deadline to February 28th. More →
A jury in California has determined that Best Buy (BBY) must pay $22 million in damages for improper use of another company’s trade secrets, and another $5 million in punitive damages. In a lawsuit filed by start-up TechForward in the United States District Court for the Central District of California last year, the company alleged that Best Buy and two of its subsidiaries misappropriated its trade secrets relating to the Guaranteed Buyback Program, which allows customers to pay for the right to exchange products for store credit to be used on future purchases at a set price. A jury decided on Wednesday that Best Buy is guilty of making illegal use of TechForward’s trade secrets after working for months with the company and then deciding to cancel the deal and implement its own buyback program. More →
Shares of Best Buy (BBY) tumbled on Tuesday following the company’s weaker-than-expected earnings report. The struggling consumer electronics retailer posted third-quarter results of $0.03 per share, well below Wall Street’s expectations of $0.12. Best Buy’s profit fell a whopping 94% from a year ago while sales fell 3.5% to $10.75 billion from $11.15 billion. CEO Hubert Joly was not pleased with the earnings, although he did note that Best Buy is “taking steps to rejuvenate its business.” More →
With its new Windows 8 operating system, Microsoft (MSFT) has brought a complete overhaul to the Windows platform that includes an emphasis on the Metro user interface and touch capabilities. The changes to the operating system represent a shift in the PC industry as tablets and smartphones enter into the mainstream. Consumers who have used older versions of Windows for years, however, are facing uncertainty when upgrading to Windows 8. Microsoft and its retailer partners understand this and are investing heavily to educate consumers. According to Forbes, Best Buy (BBY) has spent more than 50,000 hours training its employees to become Windows 8 experts. More →
Best Buy’s (BBY) Insignia Flex Tablet teased last week will cost between $239 and $259, nearly half the price of an Apple (AAPL) iPad, according to Reuters’ sources. The 9.7-inch tablet launches on November 11th and is Best Buy’s first Insignia-branded tablet. It will have a 1GHz dual-core processor, 10 hours of battery life on a single charge and Android 4.0 Ice Cream Sandwich. Reuters adds that the slate will also have a front-facing camera for video chats and a weight of only 1.45 pounds. Best Buy still hasn’t released any details on how much memory the Insignia Flex Tablet will have or whether or not it will have any kind of memory card slot for expansion. More →
Best Buy (BBY) is preparing to go head-to-head with the iPad and every single Android tablet on the market. The electronics retail store casually posted an image of its upcoming Insignia Flex Tablet on its Facebook (FB) page revealing that the slate will come with a 9.7-inch display, a dual-core 1GHz processor, 10 hours of battery life and Android 4.0 Ice Cream Sandwich.
Best Buy (BBY) is looking to better compete with online retailers such as Amazon (AMZN) this holiday season and will reportedly begin to match prices of its Internet-based competitors. The struggling electronics chain is also said to offer free home delivery on items that are out of stock in stores, according to The Wall Street Journal. The changes are part of the company’s efforts to decrease the growing percentage of people who browse Best Buy’s stores and then buy from online competitors, a practice known as “showrooming.” Best Buy estimates that the percentage of customers who showroom has increased about three percentage points in the last two years and now sits in the mid teens. The company believes that one in five showrooming shoppers makes a purchase in the store, however, and that number is expected to increase following the introduction of online price matching. More →
Those who thought they would be safe preordering an iPhone 5 from Best Buy (BBY) might be in for some bad news. 9to5Mac got its hands on an internal Best Buy memo that acknowledges the company won’t be able to fulfill its iPhone 5 preorders in a timely manner due to “current inventory allocation.” So what does that mean for customers who preordered their Apple (AAPL) smartphones through Best Buy? Apparently the company plans to have all its preorders fulfilled by mid-October, or “no later than 28 days from launch.” Maybe standing outside an Apple store all night makes a little more sense than we thought. More →
Best Buy (BBY) on Monday announced that it has reached an agreement with the company’s founder Richard Schulze that permits him to form an investment group and conduct due diligence. The Board of Directors is also prepared to offer Schulze two Board seats. The founder was given 60 days to propose a fully financed definitive agreement to the company, however if the proposal is rejected Schulze will not be able to pursue an acquisition until January 2013. Best Buy’s announcement comes shortly after the company named Hubert Joly its CEO and formally rejected Schulze’s initial takeover bid. Best Buy’s press release follows below. More →
Best Buy’s (BBY) major structural changes may be necessary, but the company is in for a rocky ride during this transitional period. The big box retailer on Tuesday reported that its second-quarter earnings in 2012 totaled $12 million, or $0.04 per share — roughly 91% lower than the $128 million, or $0.34 per share it reported in the second quarter of 2011. The company said the big reason for its decline in profits was that it paid $91 million in restructuring charges related to store closings. Best Buy’s revenues also declined to $10.5 billion in the quarter, down 3% from the $10.8 billion the company reported in Q2 2011. Needless to say, the company’s performance presents an immediate challenge for new Best Buy CEO Hubert Joly, who was officially appointed to the position on Monday. More →
Best Buy (BBY) on Monday announced that former Carlson boss Hubert Joly will take over as chief executive officer beginning next month. The retail giant’s former CEO, Brian Dunn, stepped down without warning this past April after the big-box retailer hit a rough patch and said during its fourth-quarter earnings call that it would shutter 50 U.S. stores. Now, The Wall Street Journal reports that Joly will be Dunn’s permanent replacement beginning in September. Best Buy still has an $8.5 billion buyout bid on the table from founder and former CEO Richard Schulze, though he is reportedly planning to revise his offer in an effort to make it more attractive. Joly stepped down from his CEO role at Carlson, which owns global franchises including Radisson and TGI Friday’s, on Sunday and former CFO Trudy Rautio will take his place, according to the Journal.
UPDATE: Barron’s is reporting that Best Buy has formally rejected Schulze’s buyout offer. The former CEO said he was “disappointed and surprised” by the company’s announcement and noted that he “will continue to pursue my proposal which will provide compelling value for shareholders and create new opportunities for customers and a bright future for Best Buy employees.” More →
Best Buy (BBY) founder Richard Schulze sees the writing on the wall: the era of big-box consumer electronics stores is coming to an end. The Wall Street Journal reports that Schulze wants to dramatically pare down his stores’ floor space, cut prices to remain competitive with Amazon (AMZN) and to make “in-store customer-service experience is as good as” Apple’s (AAPL). WSJ reports that Schulze’s plan is dauntingly ambitious and will involve shuttering at least 50 big-box stores and cutting costs by $800 million by 2015. Such changes would could have a negative impact on Best Buy’s bottom line, which is why Schulze is considering taking the company private again so that he can focus on the big picture and make necessary changes without facing pressure from Wall Street. More →