Best Buy boss Brian Dunn resigns amid investigation
Wednesday 11 April 2012
Best Buy boss Brian Dunn has resigned abruptly after the troubled consumer electronics chain launched an internal investigation into his "personal conduct".
Minneapolis-based Best Buy said last night that it was conducting the probe after initially only saying the departure was a "mutual decision". But the chain would not give any specifics on the circumstances surrounding the investigation of Mr Dunn, a 28-year Best Buy veteran who had been chief executive since 2009.
"Certain issues were brought to the board's attention regarding Dunn's personal conduct, unrelated to the company's operations or financial controls, and an audit committee investigation was initiated," said a company statement.
"Prior to the completion of the investigation, Mr Dunn chose to resign."
Mr Dunn, who started his career at Best Buy as a sales clerk in the 1980s, could not be reached for comment about the investigation. But earlier yesterday he said he was leaving Best Buy in the position "for a strong future".
Best Buy has not disclosed the terms of Mr Dunn's severance package, but his annual compensation for fiscal 2010, the latest figures available, was worth about five million dollars (£3.1m) - half of what it was in the prior financial year.
The resignation adds to Best Buy's mounting problems. Up until a few years ago, America's largest consumer electronics retailer was the place people went to grab TVs and cameras. But the chain has suffered in the economic downturn and is widely criticised for not being quick to respond to growing competition and changing shopping habits.
In November, Carphone Warehouse, which opened 11 UK stores in a joint venture with Best Buy in 2010, said it would shut them down, following losses of at least £83m.
While industry watchers had been calling for changes at Best Buy, news of the investigation did not sit well with Wall Street. On the news of the probe, Best Buy's shares fell almost 6%, or 1.33 dollars, to close at 21.32, after initially climbing higher on Mr Dunn's departure. Best Buy's shares have lost more than half of their value since April 2006, when they were trading at 56.66 dollars a share.
"It's good news that he's gone," said Brian Sozzi, chief equities analyst at NBG Productions, an independent research firm. "But this adds another layer of uncertainty."
A new CEO will face a big challenge trying to usher Best Buy into a new era. Sales of TVs, digital cameras and video game consoles - once the bread-and-butter of Best Buy - have weakened, while sales of lower-margin items like tablet computers, smartphones and e-readers have increased.
Adding to that, people increasingly use the stores of big-box retailers like Best Buy as showrooms to browse for products and then go online to buy items at lower prices.
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