Best Buy warns sales will be down in Q3, pair of executives plan to exit

Best Buy has announced a new leadership organization for its U.S. operations, including the departure of Mike Vitelli, president of Best Buy's U.S. business, according to a news release. He who will retire in February. Executive Vice President of U.S. Operations Tim Sheehan will also leave the Richfield-based retailer at the end of October. Best Buy also gave a dismal preview of its third-quarter figures.

Author:
BMTN Staff
Updated:
Mar 8, 2018
Original:
Oct 25, 2012

Best Buy has announced a new leadership organization for its U.S. operations, including the departure of Mike Vitelli, president of Best Buy's U.S. business, according to a news release. He who will retire in February. Executive Vice President of U.S. Operations Tim Sheehan will also leave the Richfield-based retailer at the end of October.

The personal changes come about two weeks after Best Buy announced Chief Financial Officer James Muehlbauer was leaving the company.

CEO Hubert Joly took over as chief executive officer in early September. He's working to turn around the struggling consumer electronics giant.

Best Buy also gave a dismal preview of its third-quarter figures on Wednesday, predicting net come would be "significantly below" last year, the Associated Press reports.

The Star Tribune also reports Hubert Joly will discuss his strategies with investors on Nov. 1. That's just two weeks before Best Buy's largest shareholder Richard Schulze is expected to submit a proposal to take the company he founded private.

Schulze abruptly cut ties with Best Buy in June after an internal investigation found he withheld information from the board about former CEO Brian Dunn's inappropriate relationship with a female employee.

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Despite some opposition from board members, Best Buy CEO Hubert Joly has agreed to let company founder Richard Schulze and his team of potential investors to interview eight to 10 key executives, the Star Tribune reports. Schulze, Best Buy's largest shareholder, has until mid-November to make a buyout offer to take the struggling Richfield-based electronics retailer private. He is under a 60-day deadline to present a proposal to the company’s Board of Directors.

About 2,000 loss-prevention workers at Best Buy are being moved away from store entrances to help sell more merchandise, Bloomberg reports. A spokeswoman with the troubled Richfield-based big-box retailer says no one is being let go.

Interim CEO Mike Mikan told shareholders and employees, gathered at Best Buy's annual meeting Thursday, the company is committed to changing in fundamental ways. The Richfield-based electronics retail giant plans to provide new employee training for better customer service, reduce its retail footprint and tackle trends like "showrooming" that are hurting the retailer's sales. Best Buy is also recovering from three months of internal drama, including the abrupt resignation of its founder and largest share holder Richard Schulze. He was not seen at Thursday's meeting.

Scott Durchslag is officially in charge of overseeing Best Buy's online and mobile business. Last week, he was hired as the senior vice president and president Online and Global e-Commerce at the Richfield-based company. The former Expedia executive tells Business Insider that BestBuy.com has to keep up with competitors, operate as seamlessly as possible and add layers of innovation in social realms.

Hubert Joly, Best Buy's new new president and CEO, officially joined the troubled Richfield-based consumer electronics giant on Tuesday, the Star Tribune reports. Joly, a native of France, is the first chief executive officer at Best Buy recruited from outside of the company. He most recently led the Minnetonka-based hospitality and travel company Carlson. Joly will begin his new role at Best Buy on the sales floor of several stores in the Twin Cities metro. He tells Reuters, "I want to not learn our businesses from the headquarters. I want to learn from the front line."

Best Buy's new top executive, Hubert Joly, tells the Star Tribune that he's "not a big fan of shrinking the company." He wants the Richfield-based electronics giant to maximize sales with its existing stores. One analyst was also a bit puzzled by Joly's comments about "showrooming." "I don't think he's right. I think there's plenty of evidence of people doing that," said Laura Kennedy.

Richfield-based Best Buy says its second-quarter net income fell 90 percent as the big-box electronics chain logged restructuring charges and saw sales continue to decline. Best Buy also withdrew its earnings view for the year. The company says it earned $12 million, or 4 cents per share, in the quarter ended Aug. 4 -- compared with $128 million, or 34 cents per share.

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