Reactions Mixed as Best Buy Appoints Hubert Joly CEO
Hubert Joly, the former chief executive of global hospitality company Carlson, will take the reins as president and CEO of Richfield-based Best Buy Company, Inc.
On Monday, Best Buy announced that Joly will take over as president and CEO in early September. The company began its CEO search in April after Brian Dunn resigned amid a scandal involving “an extremely close personal relationship with a female employee.”
Joly succeeds interim CEO G. Mike Mikan, who will continue to serve on Best Buy’s board and will become chairman of the company’s audit committee.
Best Buy touted Joly’s “expertise in turnaround and growth across the media, technology, and service sectors.” For example, he “led the restructuring and growth” of France-based media and telecommunications company Vivendi and also led the turnaround of France-based EDS (now part of HP), according to Best Buy.
Joly also grew Carlson Wagonlit Travel’s revenue from $8 billion in 2003 to $25 billion in 2007, according to Best Buy. He then became CEO of Minnetonka-based Carlson, whose brands include T.G.I. Friday’s restaurants and Radisson hotels, succeeding Marilyn Carlson Nelson, the daughter of founder Curt Carlson. Joly has recently led Carlson as it pursues its “Ambition 2015” plan—a strategy to reposition its Radisson hotel brand and expand its presence in emerging countries.
Joly joins Best Buy as the struggling retailer attempts to turn itself around—and at a time when founder and former chairman Richard Schulze is attempting to take the company private.
Investors appear disappointed with the CEO announcement, which came amid more public back-and-forth between the company’s board and Schulze, whose negotiations appear to have stalled. Shares of Best Buy’s stock were trading down 7.5 percent at $18.74 early Monday afternoon.
Meanwhile, analyst reactions appear to be mixed. Brian Sozzi, chief equities analyst at NBG Productions, told Twin Cities Business that the appointment is “completely out of the blue,” as it precedes the company’s quarterly earnings announcement by one day, and “in a million years you’d not have thought this would be the guy to lead” Best Buy, largely because he is a “non-retail executive.”
Sozzi predicted that Joly may have been selected to “surgically pick apart the business and reposition it going forward,” but in order to do so, he needs to surround himself with a team of expert retail leaders.
But several analysts have applauded the appointment of Joly, according to a report by Reuters. “He is a little bit older, a little bit more seasoned,” Anthony Chukumba of BB&T Capital Markets told the news outlet. “I think this is a home run for Best Buy.”
Joly said in a statement that he will work with Best Buy’s management team and employees “to pursue what are exciting growth opportunities for Best Buy—both online and offline, through a combination of competitive prices, superior service, new growth engines, and innovations. . .”
In response to Joly’s appointment, Schulze described the former Carlson leader as “an accomplished executive” but said that the company “continues to face enormous challenges and needs a clear plan and a proven leadership team with deep retail experience and knowledge of Best Buy to win back customers, inspire employees, and reinvigorate its trusted brand.”
Schulze previously said that he has tapped former Best Buy CEO Brad Anderson and former President and Chief Operating Officer Al Lenzmeier to serve on his leadership team, in the event that his takeover is successful.