Best Buy’s Schulze Resigns Early, Mulls Options for 20% Stake
Best Buy Company founder Richard Schulze on Thursday announced plans to immediately resign from the board and said he would explore options for his 20.1 percent ownership stake in the Richfield-based electronics giant.
Following a scandal involving the company’s former CEO, Schulze was set to step down as chairman at the conclusion of Best Buy’s annual meeting on June 21—and the company previously announced that he would serve out the remainder of his director term, which goes through June 2013. Thursday’s announcement accelerates his departure from both posts.
“I continue to believe in Best Buy and its future—and care deeply about its customers, employees, and shareholders,” Schulze said in a statement issued by a corporate and financial communications firm that is representing him. “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. Accordingly, I have shared my views with the board and today informed them of my decision to resign as chairman and a director, effective immediately, in order to explore all available options for my ownership stake.”
In April, former CEO Brian Dunn abruptly resigned. Then last month, Best Buy released the results of an independent investigation, which found that Dunn violated company policy by engaging in “an extremely close personal relationship with a female employee that negatively impacted the work environment.”
The investigation also found that Schulze “acted inappropriately” when he failed to notify Best Buy’s audit committee after learning in December about allegations of such a relationship. The report indicates that an unnamed company executive provided Schulze with a written statement from another employee that contained allegations about a possible inappropriate relationship. Schulze did confront Dunn and handed him a copy of the written statement.
Best Buy announced Thursday that Hatim Tyabji, who was scheduled to succeed Schulze as chairman on June 21, has been appointed to that position, effective immediately. The company also confirmed that Schulze told the board on Thursday morning that he would step down immediately.
“Mr. Schulze is an iconic entrepreneur, and the board offers its deep appreciation for his enormous contributions and service as Best Buy's founder and chairman,” the company said in a statement. “With hard work, leadership, and vision, Mr. Schulze built Best Buy into a $50 billion enterprise with nearly 170,000 employees across the world. In the process, he changed the landscape of American retail.”
Schulze, 71, has had strong ties to Best Buy since he founded it. In 1966, he opened a single stereo shop in St. Paul—and he later built it into the world’s largest electronics retailer. He stepped down as the company’s CEO in 2002 but vowed at the time that he would remain chairman “until I’m called away from this earth.”
The recent shakeup involving Dunn and Schulze comes amid a major company restructuring involving the closure of 50 big-box stores and 400 corporate layoffs, which were announced in late March. Best Buy has lost a number of key leaders recently.
A search process for a new Best Buy CEO is now underway. About two weeks ago, the company said it had selected Chicago-based Spencer Stuart to lead the search, which is expected to take six to nine months. Both internal and external candidates are being considered, including interim CEO G. “Mike” Mikan.