Sandy forces Best Buy to scrub NYC meeting

  • Article by: THOMAS LEE , Star Tribune
  • Updated: October 31, 2012 - 11:38 PM
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Best Buy CEO Hubert Joly

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Best Buy Co. Inc. is scrambling to reschedule CEO Hubert Joly's first meeting with investors in New York after Superstorm Sandy forced officials to cancel Joly's presentation that was scheduled for Thursday.

Finding a new location and date won't be easy for the Richfield-based consumer electronics retailer. Much of Lower Manhattan and the financial district remains flooded, thousands of flights have been canceled, and full subway service is days away.

Best Buy is trying to reschedule the meeting "as soon as we possibly can," Best Buy spokesman Matt Furman wrote in an e-mail. "The situation in the region makes it difficult to even communicate with potential locations let alone confirm an actual date."

For Best Buy, the storm couldn't have struck at a worse time. Last week, the company warned that third-quarter earnings would be "substantially lower" than the same period a year ago as sales at stores open for at least a year continue to decline. Founder Richard Schulze is expected to submit an $8 billion to $10 billion takeover bid sometime in mid-November.

Analysts say Joly needs to present a turnaround strategy to Wall Street, especially if Best Buy's board rejects Schulze's offer. In other words, investors need to know their options: sell to Schulze or stick with the company and hope Joly can resuscitate the struggling retailer.

"There's no doubt Joly needs to articulate a strategy before Schulze [bids]," said Michael Robinson, an executive vice president with the Levick consulting firm in Washington, D.C. "Anything that's par for the course would be a failure. There should be an element [in Joly's presentation] that is going to shake things up."

In addition to Schulze's bid, analysts will likely question Joly on Best Buy's recently announced plan to match competitors' online prices in some cases. They also will quiz Joly on efforts to boost online sales and whether he plans to close more Best Buy stores.

Given the hurricane-related difficulties in New York, Joly must say something new and substantive to make it worthwhile for investors to attend the presentation, said Laura Kennedy, an analyst with the Kantar Retail consulting firm outside of Boston.

"I don't know if we are going to get a lot of real information," Kennedy said. "Is there much more Joly can say?"

Thomas Lee • 612-673-4113

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