Best Buy Taps French Turnaround Artist as CEO
He will replace interim CEO Mike Mikan
Aug. 21, 2012 07:00 AM
Best Buy, the world's largest consumer electronics chain crippled by the impact of Internet sales, has brought in Hubert Joly, a Frenchman and reputed turnaround artist in media, technology and services, to run the place starting early next month after he gets a visa.
He will replace interim CEO Mike Mikan, the board member who has been filling in since April when the company parted ways with Brian Dunn, who was having an affair with an underling.
Joly will get to deal with Best Buy founder Richard Schulze, who made a tentative offer to buy the company for $8.84 billion or $24-$26 a share a couple of weeks ago and wanted to do due diligence to get financing but refused the board's accommodation over the weekend.
The board said it "believes it has insufficient information to make a reasonable conclusion with regard to Mr. Schulze's indication of interest, given the conditional nature of the proposal and Mr. Schulze's failure to date to disclose financing and equity partners."
The board said it "proposed that Mr. Schulze, beginning in January, be allowed to take his buyout offer to shareholders, should the board decide to reject any definitive proposal to acquire shares. Mr. Schulze did not accept the company proposal."
Schulze said he was "disappointed and surprised" by how abruptly discussions were terminated and unhappy with Joly's selection over someone with retail experience.
"The board initially proposed an 18 month standstill, which was completely unacceptable in light of the fact that urgent change is needed at Best Buy and value is eroding further every day that change is not effected," Schulze said. "...I am shocked by this course of action but as the largest shareholder of Best Buy, I remain hopeful that the board will engage in good faith discussions with us for the benefit of shareholders, employees and customers. Time is of the essence, and it is imperative that shareholders' interests are not further jeopardized."
Deprived of the prospect of a quick sale the company's stock dropped 7% to $18.72 Monday morning.
A graduate of McKinsey & Company, Joly is credited with turning around Vivendi's video game business, now part of Activision Blizzard, from 1999 to 2001 and integrating Universal and Vivendi's media assets in the US.
He is also supposed to have turned around the French arm of EDS, now part of HP, from 1996 to 1999 and with leading the transformation of Carlson Wagonlit Travel (CWT) into a global leader in corporate travel management, which is how he came to be CEO of CWT's Minneapolis-based parent, Carlson, the privately held worldwide hospitality and travel company that includes Radisson and TGI Friday's, in 2008.
He stepped down from that post over the weekend. He is also on the board of Ralph Lauren.
Schulze was talking about bringing back for Best Buy CEO Brad Anderson to run the privatized company. Anderson is on the Carlson board.
Kathleen Higgins Victor, who chaired the CEO search committee, said, "Hubert is a strategic thinker with deep financial acumen and global experience leading large international employee groups. Best Buy is a great company with great people, and I have every confidence that Hubert is the right person to expand Best Buy's leading position in the marketplace."
Under Mikan Best Buy established relationships with Target, Verizon and AARP, signaling a new focus on services, in addition to the company's traditional retail mission.