Best Buy Co., Inc. (NYSE: BBY), the national electronics retailer, reorganized its top management leadership and warned that third-quarter results will be “significantly lower” than last year.
It also announced a consolidation of leadership and a Nov. 1 New York analysts meeting and shareholders ahead of its Nov. 20 financial report, the Richfield, Minn. company said in a filing with the Securities and Exchange Commission.
Best Buy, of Richfield, Minn., didn't provide an earnings estimate but warned same store sales will fall at the same level as they've done in the first half of the fiscal year.
New CEO Hubert Joly said the company will trim several executive positions. He installed Shawn Score as head of all U.S. retail.
Score, a 30-year Best Buy executive, had headed the group in charge of Best Buy Mobile, the company’s small-store format.
Stephen Gillett, who heads up the company’s online operations, will be retained. Essentially Gillett will handle ecommerce and Score will focus on the U.S. brick-and-mortar operations.
“We generally view the restructuring efforts in a positive light, including the removal of the most senior members of the U.S. retail operations following the 2012 holiday season while retaining several of the more forward-thinking executives, wrote R.J. Hottovy, retail analysts as Morningstar Equity Research.
Mike Vitelli, president of Best Buy's U.S. operations is reportedly resigning. Executive VP of U.S. Operations Tim Sheehan will leave next month.. The changes will not go into effect until after the holiday season.
The development comes at an important juncture in the beleaguered company’s efforts to reinvent itself as a leaner enterprise. Its second quarters saw a 91 percent drop in income and a 3 percent decline in sales for stores open more than 14 months.
Meanwhile, Best Buy’s founder and 20-percent stakeholder Richard Schulze could make an offer to take Best Buy private because his undisclosed deadline to do so is estimated to be in mid-November.
A buyout report would be a significant game changer, initiating a series of negotiations over how much Schultze and his named buyout partners would pay. He had initially offered $24 to $26 a share, or at least 37 percent over Thursday’s share price.
Shares of best Buy tumbled more than 10 percent on Thursday, closing at $15.17, down $1.75. They're off nearly 13 percent over the past three months.
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