Best Buy chief out amid probe over conduct

 
City A.M. Reporter
BEST BUY chief executive Brian Dunn has left the world’s largest consumer electronics chain, which has struggled against stepped-up competition from internet retailers and discounters.

A spokesperson said the company veteran had left after “certain issues were brought to the board’s attention regarding Mr Dunn’s personal conduct”.

The firm said his conduct was not related to the firm’s operations or financial controls, and that he chose to resign after the company started an investigation into his behaviour.

Under Dunn’s tenure, which lasted less than three years, critics have complained that Best Buy became not much more than a showroom for Amazon.com and other internet retailers, with consumers going to Best Buy stores to sample electronics like high-definition televisions, but then buying them elsewhere at lower prices.

The company, seen as a bellwether in the consumer electronics industry, reported declines in same-store sales in six of the past seven quarters.

Despite offering bigger discounts and free shipping to lure shoppers in the 2011 holiday season, same-store sales fell 2.4 per cent in the latest quarter.

“I hate to be rude, but I think he [Dunn] was doing a terrible job. This is a company that had a sales guy in charge, and I just don’t think they are well positioned to deal with the onslaught from the internet,” said Michael Pachter, analyst at Wedbush Securities.

Shares of Best Buy closed down 5.9 per cent to $21.32 in trading yesterday, having fallen earlier in the session to $21.62, their lowest since December 2008. The stock is down more than 32 per cent since Dunn became CEO, compared with a 52.7 per cent increase in the S&P’s 500 index.

In March, Best Buy announced plans to close 50 of its 1,100 big box stores and cut 400 corporate and support jobs.

Dunn started at Best Buy as a sales associate in 1985 and rose through the ranks to become CEO in June 2009. Best Buy said director Mike Mikan will serve as interim CEO while it looks for a permanent replacement for Dunn.