Reports: Joly’s BBY Plan to Come in Phases; He Could Remain After Takeover
Hubert Joly, who took the reins as Best Buy Company’s new CEO on Monday, has reportedly indicated that his plan to turn the struggling retailer around will come in installments.
Meanwhile, some analysts are reportedly saying that Joly could remain in the top spot even if the company were to go private.
According to a Reuters report, Joly recently said that his plans for Richfield-based Best Buy include cutting non-salary expenses and luring holiday shoppers with a three-part strategy that involves offering competitive prices, stocking the right amount of popular products, and boosting customer service.
“There will be immediate short-term actions, in particular focused on the holiday season, there will be things we want to pilot or prototype so that we can test them, and then, there will be a longer-term vision,” Joly told Reuters. “For a whole variety of reasons, I want to move very quickly.”
But he said his blueprint for turning the business around is likely to come in several phases.
According to Reuters, another goal is to develop “deeper strategic relationships” with Best Buy’s key suppliers—a group that includes Apple, Samsung, Sony, Hewlett-Packard, and Toshiba.
Joly, who’s spending a good chunk of his first week wearing a blue shirt and working the floor as a salesman at Best Buy’s Minnesota stores, joins Best Buy at a time when founder and former Chairman Richard Schulze is attempting to take the company private. Schulze and Best Buy recently reached a deal that grants Schulze access to the company’s non-public financial information in order to put together a formal buyout offer, and Schulze claims to have recruited former CEO Brad Anderson and former Chief Operating Officer Al Lenzmeier to serve on his management team.
But according to a Star Tribune report, some analysts believe that Joly could remain in his position even if a private takeover occurs. Joly reportedly has close ties to Anderson, who has indicated he’s not interested in returning to the CEO position. (In 1999, Joly was CEO of Vivendi SA’s video game unit, a major vendor to Best Buy. After joining travel and hospitality company Carlson as its chief executive in 2008, Joly then recruited Anderson to join the company’s board of directors.)
Another thing that could work in Joly’s favor, according to the Star Tribune: He possesses skills that Best Buy needs—namely, turnaround expertise and international experience. Laura Kennedy, an analyst with Kantar Retail, a consulting firm outside of Boston, told the Minneapolis newspaper that “it does make sense” for Joly to stay put in the event of a private takeover. Anderson could lay out a sales growth strategy, while Joly focuses on cutting costs and restructuring the company, Kennedy reportedly said.
However, Joly’s lack of retail experience could be an issue, according to Kennedy. Wall Street might prefer that Best Buy keep Joly for a while to ensure stability—but under private ownership, the company could make leadership changes without having to worry about a drop in stock price.
Another question is whether Schulze and Joly would get along. The two have reportedly never met, and an unnamed source “close to the situation” told the newspaper that Joly tried to contact Schulze last month after being named to his new job but was rebuffed.