The challenges are mounting for Best Buy (NYSE:BBY) this week as the electronics retailer prepares to meet its future head on.
This week, the company’s largest shareholder and founder will meet with its current chief executive to discuss plans for revitalizing the struggling company. Richard Schulze and Hubert Joly have met before, but this encounter marks the “first real chance for the executives to share their points of view about the company in a substantial way,” the Minnesota Star Tribune reported.
For analysts and investors, the meeting’s timing is significant as it follows closely behind Best Buy’s Investor Conference last Friday. So far Joly and Schulze have outlined very different plans for the company’s future; while Joly has been working to implement a broad restructuring plan, which he presented to investors at the conference in New York, Schulze has been preparing to take the company private. However, according to CNBC, the two men could reach a truce in regards to Schulze’s takeover bid at the upcoming meeting.
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In the intervening months since Schultz proposed the deal, the company’s stock price has dropped from $20 per share in August to less than $14 on Monday. As a result, Best Buy’s former CEO has considered lowering his offered price from the original $24 to $26 per share. The deal is scheduled to be finalized in mid-December, after the critical holiday shopping season has begun.
Both Amazon (NASDAQ:AMZN) and Wal-Mart (NYSE:WMT) have already upped the holiday shopping season pressure, and analysts expect Best Buy will struggle to make its $400 million price-matching gamble pay off. Amid these pressures, CNBC reported that the retailer’s website was down Monday morning after receiving “unprecedented traffic.” The company told the Minnesota Public Radio station the website’s tax calculation system caused customers to “experience some delay accessing the site.” The website’s malfunction illustrates what Joly told investors last week; Best Buy must better its online shopping experience in order to compete with the success of online retailers.
Best Buy will report third quarter earnings before the market opens on Tuesday.
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