Chuck Stoody, Associated Press
Best Buy's founder taps ex-CEO for buyout
- Article by: THOMAS LEE
- Star Tribune
- July 30, 2012 - 8:53 PM
Best Buy founder Richard Schulze is getting the old gang back together.
Schulze, who is trying to retake control of the company, has recruited former CEO Brad Anderson and former president and chief operating officer Al Lenzmeier to serve on his executive team, the Star Tribune has learned.
In June, Schulze resigned from the company, which he has long chaired, after an outside investigation determined that he failed to tell the board of directors about former CEO Brian Dunn's inappropriate relationship with a female employee. Dunn stepped down in April.
Since then, Schulze, who controls 21 percent of Best Buy's stock, has been seeking to either take the company private or replace the entire board. Tapping Anderson and Lenzmeier, two executives who helped build Best Buy into the world's largest consumer electronics retailer, shows that Schulze is serious about his effort, especially with investors willing to finance a buyout attempt, said Colin McGranahan, an analyst with Sanford Bernstein & Co.
"It makes it a more-credible offer," McGranahan said.
Schulze, Anderson and Lenzmeier did not return phone calls seeking comment.
Meanwhile, Schulze has reached out to executives currently working at the Richfield-based consumer electronics retailer, Bloomberg News reported Monday.
In an e-mailed statement, Best Buy spokesman Matt Furman declined to comment specifically on Schulze's recruiting drive or to make an executive available for an interview.
"What I can say is that we're talking to senior people literally every day about joining Best Buy and being part of our future," Furman wrote. "Those are conversations leading to job offers being made and accepted."
Best Buy's sales have slowed in recent years as more shoppers flock to Apple, Wal-Mart, and online retailers like Amazon. With over 1,100 big-box stores, Best Buy has been trying to shrink its store base while boosting online and international sales.
Schulze re-teaming with Anderson makes perfect sense, McGranahan said. Best Buy arguably enjoyed its best years when Anderson served as CEO from 2002 to 2009.
Under Anderson, the company purchased Geek Squad, now a $4 billion-a-year business. Anderson and former Best Buy International CEO Robert Willett also orchestrated Best Buy's alliance with Carphone Warehouse and its acquisition of Five Star, a local electronics chain in China. Anderson also supported Willett's efforts to develop the Best Buy Mobile format in the United States.
Without Best Buy Mobile, which now generates 30 percent of the company's profits, some analysts believe Best Buy would be bankrupt by now.
But some analysts also criticize Anderson for not doing enough to build up Best Buy's online operations to counter Amazon, whose annual sales have ballooned to $48 billion. That puts the Seattle-based online retailer right on the heels of Best Buy, which generated about $51 billion of sales in fiscal 2012.
Nevertheless, Anderson, a long-time Best Buy veteran, knows the company well and enjoys Schulze's trust, McGranahan said.
"He's the right CEO for Dick Schulze," McGranahan said. "Anderson can hit the ground running. The clock is ticking and Best Buy does not have the luxury of figuring out what to do."
Thomas Lee • 612-673-4113
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