Best Buy Probes Dunn’s Conduct With Female Worker
Best Buy Company, Inc.'s board of directors is investigating allegations that former CEO Brian Dunn used company resources to carry out an inappropriate relationship with a female employee, the Star Tribune reported Thursday.
An unnamed source close to the Richfield-based electronics retailer told the newspaper that the company is investigating multiple complaints that Dunn-who abruptly resigned Tuesday-behaved inappropriately with a female subordinate.
The Star Tribune reported that Best Buy hasn't confirmed that assertion but declined when directly asked whether it wanted to challenge the Minneapolis newspaper's reporting.
However, Best Buy on Thursday told the Star Tribune that it will publicly release the findings of the investigation that's now underway and vowed to “take appropriate action.” Company officials reportedly expect to release the report in a matter of weeks.
Best Buy said Tuesday that Dunn's resignation was the result of “mutual agreement that it was time for new leadership to address the challenges that face the company.” It also said: “There were no disagreements between Mr. Dunn and the company on any matter relating to operations, financial controls, policies, or procedures.”
But later on Tuesday, in response to a Star Tribune inquiry, Best Buy told the newspaper that the board of directors' audit committee-which normally oversees the company's finances-was investigating Dunn's “personal conduct.”
Dunn's resignation comes less than two weeks after he unveiled plans for a major restructuring of the company's business model and work force. The plans include cutting 400 positions at Best Buy's Richfield headquarters, closing 50 big-box stores, shifting some big-box stores to a smaller “connected-store” format, opening 100 new standalone Best Buy Mobile stores in the United States, and adding 50 new Five Star appliance stores in China.
The company expects those moves to result in $800 million in savings during the next three years, including $250 million in savings this year.
In conjunction with its announcement about Dunn's departure, Best Buy on Tuesday named G. Mike Mikan-who has served on its board since 2008-as interim CEO. He'll lead the company as it searches for a new chief executive.
According to the Star Tribune, analysts have already named a number of potential candidates to replace Dunn. That group reportedly includes former Best Buy executive and current Advance Auto Parts CEO Darren Jackson, former Williams-Sonoma Chief Financial Officer Sharon McCollam, and former RadioShack CEO Julian Day.
In a companywide message distributed Wednesday, Mikan told Best Buy employees that the work being performed to address the company's challenges “absolutely must continue” and assured workers that he and other senior leaders are creating a “blueprint for growth.”
Best Buy-Minnesota's third-largest public company-recently reported revenue of $50.7 billion for the fiscal year that ended last month. It reported a loss of $3.36 per share for the year, compared to earnings of $3.08 per share during the previous year. Same-store sales-sales at stores open at least a year-declined 1.7 percent during the fiscal year.
The company experienced a significant setback last week, when Standard & Poor's placed the retailer's credit rating on watch “with negative implications”-an indication that the agency is considering downgrading its credit rating to “junk” status.
To read the full Star Tribune report about Best Buy's investigation into Dunn's conduct with a female worker, click here.