Best Buy Founder Looks to Go Private with Help of Former Execs
July 31, 2012 5:42 PM
comment(s) - last by
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
This article is over a month old, voting and posting comments is disabled
RE: Doesn't Add Up
8/1/2012 9:57:58 AM
It's not Amazon. When you walk into BB what do you see??
CDs. Lots of them. How much does a CD "cost" to manufacture, not much. How much did they sell them for?? $12-18. Remember the CD stores in the mall?? Where are most of them, now??
Music was a bread and butter for these places. BB doesn't margin in quantity on its other products the way it used to in music, movies, video games. Red Box, Netflix, iTunes, Pandora, Cable and Direct TV onDemand, then your Amazon and newEgg, XBox Live etc.. AT&T, Sprint and VW stores selling exactly the same phones at exactly the same price.
As consumers become more and more techy, B&M that used to abuse tech ignorance will start to fail. BB simply was doing better at the time than Circuit City, otherwise it would have fallen just the same.
Oh there is still tech ignorance out there, it just doesn't buy CDs and DVD's in bulk any more.
RE: Doesn't Add Up
8/1/2012 10:55:39 AM
Yeah the other side of the equation with BB, and the others that people have mentioned using the store pick up model. Is they all use a huge retail mark up. Only way to get around it, is work for em, when I did you get 15% or 5% above cost, whichever was better. Cold hard reality is, they need to lower prices, to compete with some Etailers and other lower margin stores like wal-mart.
"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad
Quick Note: Best Buy Axes 2,400 Jobs
July 9, 2012, 4:00 PM
Best Buy Founder/Chairman Resigns 1 Year Early
June 8, 2012, 6:20 PM
Best Buy Chairman Resigns after Probe Finds He Withheld Information
May 15, 2012, 9:29 AM
Best Buy Reports Earnings, Announces the Closing of 50 Stores
March 29, 2012, 1:26 PM
Quick Note: Google Chromebooks Now Coming with 1TB of Google Drive Space
November 21, 2014, 1:20 PM
Xiaomi Aims to be #1 Smartphone OEM Within 10 Years, Apple Urges Caution
November 21, 2014, 9:33 AM
Quick Note: Samsung's Request to Dismiss Microsoft Lawsuit is Rejected
November 20, 2014, 12:53 PM
Amazon Offers "The Washington Post" Free for Six Months to Kindle Fire Owners
November 20, 2014, 7:41 AM
Apple Watch Screen Resolution, App Limitations are Laid Bare by Developer Kit
November 19, 2014, 11:31 PM
Apple Replaces “FREE” Label with “GET” on App Downloads in iTunes App Store
November 19, 2014, 5:38 PM
Most Popular Articles
Austrian Pilots Call Surface 3 Pro Flight Bag a "Dream Come True"
November 14, 2014, 2:00 PM
Wal-Mart: Miss Thanksgiving, Get Xbox One + Master Chief Collection for $299
November 17, 2014, 9:40 PM
Nokia Explores Two Paths Back to the Smartphone Market
November 14, 2014, 9:05 PM
It's Official: Twitter is Profitable "Junk"
November 16, 2014, 10:45 PM
U.S. Marshals Using Fake, Airplane-based Cell Towers to Scan Cell Phones of Americans
November 14, 2014, 9:05 AM
Latest Blog Posts
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information