New Best Buy CFO draws praise
- Article by: THOMAS LEE
- Star Tribune
- November 12, 2012 - 9:42 PM
While Sharon McCollam will fill out Best Buy Co.'s senior management team as its next chief financial officer, there's another key gap the former Williams-Sonoma executive is incredibly eager to fill.
"E-commerce," McCollam emphatically told the Star Tribune. "Best Buy is the 11th-largest Internet retailer but we should be much bigger than that."
How McCollam, who was named CFO and chief administrative officer Monday, fits into Best Buy's new Internet strategy remains to be seen. But one thing is clear: Wall Street loves McCollam.
"It's a phenomenal hire," said David Strasser, a retail analyst with Janney Capital Markets. "She was one of the best CFOs I ever came across in my career."
As chief operating officer and CFO of Williams-Sonoma, McCollam is widely credited for transforming the company from a collection of physical stores that sold home goods to a fast-growing Internet retailer. The hope is that she can do the same for Best Buy when she joins the Richfield-based colossus in December.
McCollam, 50, rounds out CEO Hubert Joly's core executive team at a time when founder Richard Schulze is expected to make an offer to take the struggling consumer electronics retailer private. A source close to Schulze told the Star Tribune that Schulze won't make a bid until December because he suspects poor holiday sales might further drive down Best Buy's stock price. Since Schulze will likely borrow billions of dollars to finance the deal, he doesn't want to overpay for the company, the source said.
In the meantime, McCollam's appointment will give Joly a much-needed boost as he prepares to meet investors for the first time in New York on Tuesday. McCollam said she's unlikely to attend because of scheduling conflicts.
"The hiring is indicative of a CEO who is clearly able to convey a cohesive story," Strasser said.
Under McCollam, Williams- Sonoma's e-commerce sales jumped nearly 18 percent in fiscal 2011 to $1.4 billion compared to $1.19 billion in the previous year.
"There are a lot of similarities in the situation between Williams-Sonoma and Best Buy," said Carol Spieckerman, president of the Newmarketbuilders consulting firm. "Both were retailers that were very store-biased. She transformed Williams-Sonoma into a highly efficient, omni-channel retailer."
McCollam was a top candidate to lead Williams-Sonoma but the CEO job eventually went to company President Laura Alber. McCollam retired earlier this year but her name soon surfaced as a possible replacement for Brian Dunn, who resigned as Best Buy CEO in April amid allegations that he had an affair with a female employee.
Asked if Best Buy tried to recruit her as CEO, McCollam replied: "I was retired. I wasn't taking any calls about any opportunities. But analysts knew that the excitement of transforming a company like Best Buy would be something very, very interesting to me."
McCollam said she was particularly excited about how Best Buy can use its vast amounts of consumer data to better market products to shoppers.
She also thinks the company's service business, including Geek Squad, is "very exclusive to Best Buy's model."
"You are trusting us every time you use the products that you bought in our stores," McCollam said.
In addition to e-commerce, McCollam will likely oversee the company's effort to close underperforming stores and remodel others into smaller "Connected Store" formats that focus on mobile devices such as smartphones and tablets.
McCollam will apply a more analytical and delicate touch to Best Buy's real estate portfolio, Strasser said.
"I think [Best Buy] is an incredibly powerful brand," she said. "This is one of the most exciting retail transformations of the decade."
Thomas Lee • 612-673-4113
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