Did Controversies CRUSH Best Buy’s Founder?
Best Buy (NYSE:BBY) chairman and founder is leaving ship. Richard Schulze announced on Thursday that his resignation was effective immediately and that he was looking to explore options for his 20.1 percent ownership stake in the company. Schulze was also the company’s chief executive for 36 years until 2002.
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“I continue to believe in Best Buy and its future — and care deeply about its customers, employees and shareholders,” Schulze said. “There is an urgent need for Best Buy to reinvigorate growth by reconnecting with today’s customers and building pathways to the next generation of consumers.”
In a separate release, Best Buy announced Hatim Tyabji will take on as chairman immediately. The change represents “an acceleration of the timing of the planned leadership transition,” the company said.
Schulze, who is also the company’s largest shareholder, had planned to step down as chairman after Best Buy’s annual meeting on June 21, but later decided to stay on until 2013.
The Best Buy stock has been under trouble since a scandal involving former chief executive Brian Dunn emerged earlier this year. The company started a probe after it was revealed that Dunn’s “extremely close personal relationship” with a subordinate “negatively impacted the work environment.” The stock fell 15 percent this year by end of the day Wednesday.
Although an internal probe found that Dunn had not misused any company assets during his relationship, he resigned from his position in April. The investigation also found that Schulze was made aware of Dunn’s actions last December, but didn’t pass along the information to the board’s ethics panel right away, instead confronting the CEO on his own. Best Buy has chosen executive-search firm Spencer Stuart to find its new CEO and appointed director Mike Mikan as interim chief executive in April.
Best Buy has also been fighting increasing competition from online retailers such as Amazon.com (NASDAQ:AMZN) and announced in March that it would close 50 big box stores in the U.S. and eliminate 400 corporate and support jobs to cut $800 million in cost over the next three years.
Shares were down more than 7 percent, or $1.41, on Thursday morning, at $18.48.