Saturday, June 9, 2012

Best Buy founder leaves company following scandal

Shares in the company fell as Mr Schulze said he would leave the company with immediate effect.
The 71-year old had originally planned to step down as chairman later this month and remain a director for another year at the retailer, which is known for its army of “blue shirt” staff who are extremely knowledgable about the products they sell.
Mr Schulze served as Best Buy’s chief executive, chairman and a director for 36 years until 2002 when he became just chairman and a director. However, his position has been under pressure ever since Brian Dunn resigned as chief executive of the company in April following a relationship with a female employee.
It later emerged that Best Buy was investigating whether Mr Dunn had misused company resources during the course of the relationship.
Although the investigation concluded that Mr Dunn had not misused Best Buy’s money, it said he had exercised “extremely poor judgment”.
It also criticised him for failing to notify the board when allegations about the relationship were brought to him last December.
In a statement yesterday, Mr Schulze said: “I continue to believe in Best Buy and its future and care deeply about its customers, employees and shareholders.
“There is an urgent need for Best Buy to reinvigorate growth by reconnecting with today’s customers and building pathways to the next generation of consumers.”
The news saw Best Buy’s shares fall 3.8pc to $19.11.
“That’s a lot of shares suddenly on the market, you have increased supply, that’s going to drive the price down,” said BB&T Capital Markets analyst Anthony Chukumba.
Mr Schulze will be replaced by Hatim Tyabji as the retailer’s chairman.

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