A year ago, most analysts on Wall Street were betting Best Buy would go belly up, like its rival Circuit City. But now the Richfield-based company is being hailed as "one of the biggest turnarounds in retail history,"according to The New York Times.
Best Buy stock is among the top performers on Wall Street, with a gain of nearly 240 percent this year. Other retailers are trying to figure it out how the retailer survived and thrived in the age of Amazon.
The Times says credit goes to a relatively unknown new CEO who took over not long after a scandal involving the previous chief executive and the departure of founder Richard Schulze. Schulze resigned amid declining sales, although he now serves as Chairman Emeritus at the company.
French-born Hubert Joly took over in August 2012. He had been chief executive of privately-held Carlson, which owns the travel service Carlson Wagonlit, the Radisson Hotel chain and T.G.I. Fridays restaurants. The Times says that's why investors didn't know him. And because the search for a new CEO took nine months, most assumed many others had turned down the job.
One of the trends that’s helping Best Buy is the age of the average television. Flat-screens first saw strong sales between 2004 and 2006, and since they last about nine years, a large number of early adapters should soon be looking to replace them.
MPR News reported that Best Buy stock took a fourth quarter dip when the company announced it planned to be competitive during the holiday season. Still, it reported third quarter net income of $54 million, compared with a $10 million loss a year ago.
In a Star Tribune profile, Joly told reporters the company was pleased with its turnaround strategy. The "Renew Blue" campaign boosted online sales, made better use of showroom floor space and emphasized in-store customer experience.
"We are very pleased witht he first year of the transformation, but the glass is half-empty," Joly said. "We will be on a multiyear journey."