Reporting Susie Jones
MINNEAPOLIS (WCCO) – Best Buy CEO Brian Dunn is resigning from the nation’s largest consumer electronics retailer, which has been struggling to rebound amid growing competition and changing shopping habits.
Twin Cities-based Best Buy called it a mutual decision, and said there were no disagreements with Dunn on any matter relating to operations, financial controls, policies or procedures. But the company noted that it was time for new leadership given the challenges facing the company.
Fifty-year-old Dunn started his career as a store associate and has been with the company for 28 years.
Jill Schlesinger of CBS MoneyWatch says it a bitter pill for Dunn to swallow.
“Maybe this is sort of like falling on the sword, but on the other hand it seems a little bit sad because this is a guy who devoted himself to the company,” Schlesinger said.
The announcement comes a little less than two weeks after Best Buy unveiled a restructuring plan. The chain plans to close 50 of its U.S. big-box stores, open 100 small-format stores and cut $800 million in costs over the next five years.
“They are just trying to trim their expenses. You know, Best Buy shares have lost more than half their value in the last five years,” said Schlesinger.
Best Buy, whose sales have been stung by competition from online sellers like Amazon.com, is trying to become nimbler to avoid the fate of former rival Circuit City, which liquidated its business in 2009.
Schlesinger says Best Buy is likely to continue to struggle going forward.
“They have to figure out how to re-channel their business and make them friendly for how consumers shop these days, which is so much in the online world,” she said.
Last week, credit ratings agency Standard & Poor’s put its corporate credit rating and other ratings on watch for a possible downgrade, saying at the time that the company’s restructuring plan “underscores the problems that Best Buy is having with its current business model.”