The crumbling of “Best Buy Inc” is growing worse as the man who founded the electronics store resigns this week, and he’s about to sell off the largest ownership stake of 20.1% in stock.
Schulze had earlier planned to step down as the chairman of the board in May 2012, after he failed to notify the company’s audit committee of misconduct by former CEO Brian Dunn, who resigned as CEO under a mutual agreement that it was time for new leadership to address Best Buy’s problems.
Prior to Dunn’s resignation Best Buy had announced it was closing 50 stores and laying off 400 employees as part of a “transformation strategy” as business had been on a steep decline due to the competitive rise of online internet deals cutting into their profits.
However, Schulze was planning on staying on with the company as director for at least another year, but it appears the 71-year-old has had a change of heart and wants completely out.
In a statement Schulze said, “I continue to believe in Best Buy and its future – and care deeply about its customers, employees and shareholders. There is an urgent need for Best Buy to reinvigorate growth by reconnecting with today’s customers and building pathways to the next generation of consumers.”
For the time being, Director G. Mike Mikan has been named interim CEO of the company as it searches for a new one and Hatim Tyabji, chairman of the audit committee, is to replace Schulze as chairman.
Best Buy was named “Company of the Year” by Forbes magazine in 2004, “Specialty Retailer of the Decade” by Discount Store News in 2001, ranked in the Top 10 of “America’s Most Generous Corporations” by Forbes magazine in 2005, and made Fortune magazine’s List of Most Admired Companies in 2006.
However, in 2011, during the three-month period ended February 26, Best Buy saw its revenue and profits slide, generating a profit of $651 million on revenue of $16.26 billion. In comparison to the same period in 2010, it tallied $16.55 billion in revenue and a $779 million profit.