Best Buy announced that CEO Brian Dunn has resigned, and will be temporarily replaced by Director G. Mike Mikan, a former CFO of UnitedHealth.
For car audio and for all of consumer electronics, the change in leadership is expected to create a shift in the way Best Buy handles connectivity.
Kenwood’s Keith Lehmann noted “The change in leadership is indicative of a sweeping movement by Best Buy to respond to the dynamics in the market. This also includes mobile… to structure change to a new focus on connectivity. Best Buy is making an all out effort at this time to remain relevant in the market.”
Connectivity, of course, cuts across many product areas including computers, wireless, home theater and car electronics. “Connectivity is their big charter,” added Lehmann.
Connectivity also dovetails with Best Buy’s need to differentiate itself from online retailers.
As Reuters reports, Scott Tilghman, analyst at Caris & Co., said of Best Buy’s next CEO, “…the company needs to take a step back and figure out how they are going to differentiate themselves….The speed of transition has been their biggest challenge. ”
Roger Lanctot, Associate Director of Automotive Practice at Strategy Analytics told CEoutlook, “Best Buy has been pursuing multiple strategies in aftermarket mobile electronics. Taken individually— Ford Sync customer training, OnStar FMV, Best Buy branded PNDs, Geek Squad installation– all sound good but what was clearly missing was a unified cross-department statement that Best Buy was THE place to go for automotive aftermarket solutions. With all of the hullabaloo about driver distraction, Best Buy should/could have jumped into the fray as offering “safe” integration of aftermarket electronics. ”
Privately, industry members state that Best Buy believes car electronics is not performing as well as other categories but there is room to improve the store’s execution in the category. To that end, Best Buy recently began working with Car Toys to enter the expeditor car electronics market where it sells 12 products to car dealers and fleets.
Best Buy said Tuesday that Dunn left by “mutual agreement.”
Interim CEO Mikan said, “The Best Buy team and I will be extremely focused on successfully managing this period of transition. I want to assure our employees, customers and other key stakeholders that we will work together to achieve our company’s growth and profitability goals.”
Best Buy shares rose 1.3% to $23.23 following the announcement, said Forbes.
The chain has posted 6 straight quarters of declines in same store sales for those stores open at least 14 months.
Dunn said in a Best Buy press statement, “I have enjoyed every one of my 28 years with this company, and I leave it today in position for a strong future. I am proud of my fellow employees and I wish them the best.”