New CEO Single-Handedly Turning Best Buy Around
RICHFIELD, Minn. (WCCO) – Best Buy has a new strategy and is excited about the holiday shopping season.
But just 12 months ago, many business analysts wondered if the iconic Minnesota retailer would even survive.
The stock was in free fall, the former CEO was accused of having an affair with an employee and was ousted, and the founder of the company was attempting a hostile takeover.
But the company has made an incredible turnaround under the leadership of one man.
If you haven’t been inside a Best Buy in the last 10 months, things have changed.
Hubert Joly became the new CEO of Best Buy only 15 months ago and his fingerprints are all over the reconfigured stores. A year ago, Best Buy’s large retail outlets appeared to be a liability.
“We’re not closing stores,” Joly said. “The stores are a magnificent asset because they provide the opportunity for customers to touch, feel, learn about, ask questions, and get support.”
How does Best Buy prevent people from coming in and looking at products and then going home and clicking online?
“We love show-rooming,” he said. “Last year this was extraordinary. People thought we were going to die because people came to our store and then bought online.”
So the 54-year-old native of France is going right for you wallet. The price matching guarantee started last November is now permanent.
“We match prices, including online prices. So once you are in the store, we’ll take care of you,” he said.
He’s backing up the price guarantee with a holiday ad campaign.
Joly calls the business plan Renew Blue — his vision to reinvigorate stores, win online, and make a huge new push in appliances.
“We decided to go after that in a big way,” he said. “We have large appliances with expert staff, and we also have small appliances. Everybody needs a coffee machine, or a blender, or a juicer.”
The strategy seems to paying off, as Best Buy stock has rocketed from about $11 a share last year to more than $40 a share today.
But part of that was achieved by cutting costs and people. Best Buy said it employs about 7,500 workers in Minnesota today. About 600 lost their jobs at the Richfield corporate headquarters.
“I didn’t like doing it,” he said. “I’m not a CEO that likes to clamor how many head counts we have taken out. That’s not the focus of the company. It is truly turning to growth.”
So how can Best Buy survive by matching prices long term against companies with lower expenses like Amazon and Wal-Mart?
Joly is banking on his big box stores, superior customer service, product selection, and services like the Geek squad.
“We’re on this journey,” he said. “We invite you back to our stores to discover what we are doing and give us your feedback and we’ll keep moving forward. I’m upbeat and very positive about the assets we have, and the opportunities we have are extraordinary.”
Joly is also no stranger to Minnesota. He was the CEO of Carlson Companies before heading up Best Buy.
The company hasn’t released its Thanksgiving Day shopping hours yet but said it will soon.