New CEO set to take reins at Best Buy today
Wednesday, June 24, 2009
CHICAGO -- Almost 25 years after he was hired as a sales clerk in a small regional electronics store, Brian Dunn is set to become the next CEO of Best Buy Co. today.
The 49-year-old, who succeeds retiring CEO Brad Anderson to become the third person to lead the nation's largest consumer electronics retailer and its 155,000 employees, takes the helm at a time when the company's challenges are considerable.
Despite the liquidation of one of its chief competitors, same-store sales were down for the third straight quarter. The company's headquarters in Richfield, Minn., have hundreds of empty desks after a voluntary buyout and layoffs. And heavyweights Amazon.com, Wal-Mart Stores Inc. and Costco Wholesale Corp. all have their sights set the company's core business.
"I think he certainly has his hands full," said Morningstar analyst Brady Lemos.
For his part, Dunn -- whose appointment was announced in late January -- has spent recent months visiting Best Buy stores, occasionally tweeting about his experiences meeting employees everywhere from Anaheim, Calif. to Ankey, Iowa.
"Just left one of our stores in Honolulu and it looked great," he wrote in a tweet in April. "The way the team was working the floor was impressive. Thanks to the team!"
He'll have big shoes to fill.
Anderson, 60, is also a lifelong Best Buy employee who first started working at a stereo store that would eventually become Best Buy in 1973. Since becoming CEO in 2002, he managed to almost triple sales, which reached $45 billion at the end of its last fiscal year.
Along the way, he also made the chain the go-to location for everything from musical gizmos to computers, added installation and repair services like Geek Squad and leading the company's push to cater to and woo specific groups of customers at certain stores.
Anderson will remain on the company's board for another year.
Now, Dunn will try to use that momentum to scoop up more customers from defunct Circuit City Stores Inc. He'll also have to execute his four-part plan aimed at keeping Best Buy competitive and able to fend off attacks from retailers hungry for a piece of the company's sales.
Among them: Boosting the chain's market share in local communities by stocking stores with an assortment of products and smart employees, and amassing a "full buffet" of so-called connected digital solutions by offering everything from gadgets and accessories to smart-phones to digital music, in part through the company's growing cell phone venture called Best Buy Mobile and its recent acquisition of the popular file-swapping service Napster.
Although there are signs that the downturn is weakening -- economic activity rose in May by the largest amount in more than five years and some economists think a turnaround should begin by year end -- Best Buy may have a hard road ahead thanks to what Anderson has called "rapid, seismic changes in consumer behavior."
Whether consumers return to their spending binge -- particularly for some expensive items like appliances -- remains to be seen. During the most recent quarter, although store traffic declines were the lowest in a year, the average number of products customers bought during store visits fell.
Still, Dunn said he's optimistic about what's ahead.
"We live in a time of great pessimism and it is certainly not in vogue to project an air of hope and optimism about the future," he told investors during a conference call last week. "What I hear from our people is an expression of a deep-seated belief in the power of technology to help people and an equally powerful belief in Best Buy to unlock that promise. We're proud that in a time when so many store fronts are closing, we are opening new stores and new channels and creating new jobs around the world."