Best Buy Founder Looks to Go Private with Help of Former Execs
July 31, 2012 5:42 PM
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Schulze has been mulling over several options including going private and selling his 20 percent stake in the company
Best Buy has been in hot water for awhile now due to its inability to compete with Internet retailers, and the company's founder is looking to take Best Buy private with the help of former executives.
Richard Schulze, founder of Best Buy, is currently looking to bring former Best Buy executives onboard to help him take the company private. He hasn't reached any agreements with anyone so far, but he is in talks with two people in particular: former Chief Executive Officer Brad Anderson and Senior Vice President of Enterprise Capabilities J.D. Wilson, whose position is being eliminated.
Schulze has been considering taking the company private after
stepping down as chairman of the board
back in June. Schulze resigned after an
discovered that he had withheld information about former CEO Brian Dunn's relationship with a female employee from the board.
Ever since, Schulze has been mulling over several options including going private and selling his 20 percent stake in the company.
However, analysts say going private won't be so easy. About $1-$2 billion would need to be raised from a private-equity firm and another $7-$8 billion in debt would need to be raised. It would be difficult to get investors to sell when a takeover would cost about $30 per share, giving it a value of $11 billion.
Best Buy has has problems ever since Internet retailers like Amazon hit the scene, offering cheaper prices for the same items and low shipping costs. Amazon, at the time, wasn't collecting taxes in very many states either (however, the company recently agreed to collect sales tax in more states in exchange for more distribution centers -- ultimately allowing same-day shipping rates for customers, which could potentially hurt Best Buy even more).
Best Buy was forced to
close 50 of its stores
back in March/April. With store closings came lay-offs of 400 corporate and support jobs at that time, and then
another 2,400 jobs were axed
earlier this month. Things aren't looking so hot for the brick-and-mortar retailer, and Schulze is looking to act fast.
The Wall Street Journal
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RE: TVs are what are killing Best Buy
7/31/2012 10:43:47 PM
It's easier to find a one legged ballerina than it is to find a knowledgable Best Buy employee. I can't stand the constant commercial drone about how good a product is when they've never even asked what I'm going to use it for (such as picking up laptops for family). The first questions out of their mouths should be, 'what are you looking for it to do?' followed by, 'are you willing to overlook certain features to hit the price you want?'.
They need to lay off up-selling expensive warranties that usually overlap with manufacturer's warranties. They need to stop trying to sell a lot of expensive cables to go with equipment (and be more honest about how much 'better' Monster products are). I particularly enjoy the 'can I help you pick out a movie' types who start making recommendations without even discussing films to begin with.
I'd also think they should carry a better selection, or at least allow stuff to be ordered and picked up without charging me for shipping/handling.
I only shop their for bargain bin movies and to price shop, because family always asks for stuff to be fixed after I show up for a holiday visit. My fiancee has finally realized that shopping online is vastly cheaper for her cell phone accessory habit.
"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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