The retired executive who advised founder Richard Schulze assesses the company’s future.
Best Buy employees walk through the parking lot and to the Best Buy store in the Shops of Lyndale in Richfield, MN, Thursday, March 28, 2012.] DAVID JOLESemail@example.com - Best Buy Co. Inc. said Thursday that it will close 50 big box stores this year and eliminate 400 jobs, mostly at its corporate headquarters, in a bid to boost profits amid declining stores sales in the United States. ORG XMIT: MIN2012111614174808
Over the past year, Robert Willett has enjoyed a front-row seat to Best Buy founder Richard Schulze’s efforts to buy back the retailer. Willett, a former CEO of Best Buy International who developed the company’s Best Buy Mobile format, advised Schulze, former CEO Brad Anderson, and former president Al Lenzmeier on the buyout campaign and helped develop a business plan to revitalize the retailer. Schulze is now chairman emeritus, while Anderson and Lenzmeier serve on the board.
Since retiring from Best Buy in 2010, Willett has put his experience to good use. He is chairman of MetaPack, which makes e-commerce software, and also serves on the boards of Teknosa, Turkey’s top technology retailer, Occa-Home, an online home goods retailer based in the United Kingdom, and Mobile World in Vietnam.
He spoke with the Star Tribune in Bloomington last month on his way to Turkey and Vietnam. Due to confidentiality agreements, Willett was unable to disclose details about the buyout effort, but he did offer his take on the past, present and future of the retailer he helped launch onto the global stage.
Q: What do you think of CEO Hubert Joly joining forces with Richard Schulze and Brad Anderson?
A: Hubert is actually committed to doing two fundamental things: reinstating the price promise that Best Buy should always stand for. They lost it over the past few years. Second thing, Joly is bringing a degree of rigor there that was also lost. I also applaud him for the courage and the tenacity and common sense to be building this partnership with Brad and Dick. This is the best thing that could have happened.
Q: Best Buy seems to have stabilized now. Could this have happened had Schulze not tried to acquire the company?
A: Dick was looking for ways to reinvigorate the company. I think that was a really good thing to do. What it probably did was to galvanize the management into really thinking about what they were doing and the scale of the wonderful opportunities Best Buy has in front of it. There were a lot of conversations about where the company was going, which can only be fruitful. When history is written in 3 to 5 years’ time, this will be known as a tipping point and a re-engineering of what Best Buy stands for.
Q: A lot of people blame Dick and Brad for the problems that plagued Best Buy in recent years. What do you think?
A: I think the Great Recession that began in 2008 coincided with an enormous, massive shift away from PCs to tablets literally overnight. There were real fundamental things going on. There were huge changes in the television market. There were things that had never been seen before. Could management have done something different? The answer must be yes. The management in place under CEO Brian Dunn wasn’t responsive enough. They battened down the hatches when they should have gone harder at Best Buy’s points of difference.
Q: Can Dick, Brad, and Al Lenzmeier still contribute something to Best Buy?
A: The answer is yes. If you think about Best Buy, it’s got some real strengths. It’s got some great people. Hubert has flattened the organization not under the guise of cost reduction but under the guise of simplification. Where Brad and Al and Dick come in is bringing in some of the experiences of what worked over the last 25 years and what didn’t work to make sure Best Buy doesn’t make the same mistakes. It’s not about closing masses of stores. It’s about repurposing them, about creating a different experience. With Brad and Al, the chances of success increase 200 percent.
Q: Why has Best Buy Mobile done so well?
A: We were constantly innovating. We took the time to activate a device from 40 minutes to 3 or 4 minutes. We had some great people in the U.S. stores like Jude Buckley and Shawn Score. It wasn’t rocket science. The real strength of the business is that you could go into Best Buy and figure out who was accountable. We made it a stand-alone business, installed a separate board of directors and then we reincorporated back into the company. As a result, it didn’t suffer from the nonsense and politics.
Q: People expect Joly to pull Best Buy out of places like China and Europe. Smart move?
A: I don’t know. The management has to deal with the situation they face. They have to focus, they can’t be butterflies and touch everything. At the end of the day, when you go international, it’s about income and sales. It’s about the lessons learned. Candidly, I would go into countries online. That’s the way you assess the market. If you like it, you put a store down. The days of opening stores everywhere are over. I think some form of international will be there but it doesn’t have to be bricks and mortar and you don’t have to own the stores. You can do a joint venture. You could do franchises. What you can’t do is to let your core market be under pressure. They have to focus on the U.S. in the next year or so. That’s the No. 1 priority.
Thomas Lee • 612-673-4113