Best Buy CEO Brad Anderson to retireby Martin Moylan, Minnesota Public Radio
Best Buy, the consumer electronics powerhouse, is getting a new CEO. Brad Anderson, who has led the Richfield company since 2002, announced today he'll retire in June. Anderson will be succeeded by current Best Buy president Brian Dunn.
Minneapolis — Like most every retailer, Best Buy has been struggling lately. Sales at Best Buy stores open at least 14 months slipped 6.5 percent in December. The company's stock is way down; its profits are eroding, and some 500 corporate headquarters employees are taking buyouts as part of an effort to slash costs.
But some of Best Buy's rivals have been hurt even more by the economic recession. Long-time nemesis Circuit City is going out of business, closing more than 700 stores nationwide.
In a conference call with analysts, Anderson said it's time to leave the CEO post.
"It's right for me, because I'd like to work less and spend more time with my family. It's right for Brian, because he's ready for the new challenge, which also makes it right for Best Buy and our shareholders," said Anderson.
Anderson said Best Buy is at a crucial junction in its history and a new leader should chart its course.
"The turmoil of the moment is actually an opportunity. The challenge of this new leadership team taking this on and owning the brand and owning outcome of taking the company to the next level it needs to come to, it's the right moment in time to do that," said Anderson.
Under Anderson's leadership, Best Buy's revenue more than doubled to $40 billion annually. Profits grew at nearly a 17 percent annual rate.
In addition, Anderson oversaw Best Buy's expansion into China, Mexico and Europe, and he changed the company's focus with a program called customer centricity, in which the company developed a handful of profiles of its most typical customers and re-organized stores to cater to the most important profile at each location.
Like Anderson, Dunn started on Best Buy's sales floor and rose up the executive ranks. Dunn joined the company as a VCR salesman in 1985. He has been president and chief operating officer of Best Buy since 2006. He is 48 years old.
Dunn said the stumbling economy isn't going to change Best Buy's focus. "We continue to be in uncharted economic waters, but one thing is certain: Our strategy remains unchanged," said Dunn.
That strategy, he says, is to focus customers and enrich their lives with the products Best Buy sells, empowering them with technology.
Dunn said Best Buy is intent on picking up as many customers as possible from Circuit City and other failed or faltering rivals.
"This is entirely about customer acquisition for us, as we go through this difficult time," explained Dunn.
With consumers holding tightly on to their wallets during the recession, Best Buy hasn't been able to take full advantage of Circuit City's demise. Same-store sales, a key measure of Best Buy's sales, have been slipping, but the company says it's getting a bigger share of the money consumers are spending on consumer electronics.
Many analysts view Wal-Mart as Best Buy's chief rival, but Dunn is taking a really wide view on competition.
"Wal-Mart is a great retailer, and I have a lot of respect for them. They are absolutely a competitor in this space. Amazon is a competitor in this space. But more broadly, anybody who provides any sort of discretionary experience I view as a competitor. We're competing for that discretionary dollar," said Dunn.
Indeed, Best Buy sells a lot of things people are choosing to do without these days: big, expensive TVs, digital cameras, MP3 players, movies, video gaming systems and other toys.
Retail analyst Howard Davidowitz praised Dunn's elevation to the top job at Best Buy.
"You get someone who has proved himself every step of the way in Best Buy. Actually performing well as every level, which clearly Dunn has done," said Davidowitz.
Now with Best Buy arguably facing the toughest sales environment in its history, Wall Street, employees and customers will be watching to see what Dunn can do to turn around Best Buy. Best Buy shares were up 8 cents today to close at $27.31.
- All Things Considered, 01/21/2009, 5:20 p.m.