Best Buy Founder Mulling Bid to Take Electronics Retailer Private

Richard Schulze Best BuyNEW YORK -- Best Buy (BBY) founder Richard Schulze may be considering a bid to take the electronics retailer private, according to a report by The Wall Street Journal.

The report, citing people familiar with Schulze's thinking, sent Best Buy shares higher Tuesday afternoon. The stock closed up 5%.

Richard Schulze, 71, founded the company in 1966 and is its largest shareholder by far with a 20% stake. The second-largest holder, the mutual fund manager Fidelity Management & Research Co., has 6.9%.

Schulze said earlier this month that he was considering options for his stake.

The WSJ report reiterated that Schulze could still sell his stake. But it said his "preference" is to take the company private, although the process of finding potential buyout partners is in the early stages.

Schulze initially announced in May that he would step down on June 21 at the company's annual meeting after an investigation found he knew that the then CEO Brian Dunn was having an inappropriate relationship with a female staffer. At the time he said he would remain as chairman until after the company's annual meeting on June 21 and as a director through the 2013 annual meeting.

However, he resigned abruptly June 7 instead.

"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," Schulze said in a statement on June 7. "Accordingly, I have shared my views with the Board and today informed them of my decision to resign as chairman and a director, effective immediately, in order to explore all available options for my ownership stake."

Best Buy and a spokesman for Schulze declined to comment.

Shares of Best Buy rose 86 cents, or 4.7%, to close at $19.37. The stock slipped 11 cents in after-hours trading. The stock is down about 21% since the beginning of the year.




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Waso the DJ

Half the time Best Buy employees don't know what they are doing or how to do their job near me. Also when most of their merchandise is online and almost all of it including the in store stuff says who it's actually shipping from and who you're actually buying it from like Amazon... there's no wonder why this chain is going bankrupt and it's their fault especially when the people who check their phones for prices are usually checking best buy's website so the corporation is at fault and yet on 20/20 they blamed the consumer. SCREW YOU! BEST BUY!

June 27 2012 at 11:07 AM Report abuse rate up rate down Reply
digitalmag

Unfortunately that seems to be the way the world works these days. No training, no focus on quality and no investment in employees. I think it is not limited to Best Buy; it seems to be everywhere. In the distant past a single wage earner could support a family on a retail paycheck. We all know that such a situation is long gone. The people who do the work for most retailers are just passing through because there is no reason to make a long term commitment. There is no way to live on the wages retailers pay.

Look at how little we value education. When I was in the ninth grade I took 9 different shop classes. Needless to say, I have a pretty good idea of how things like plumbing and electricity work. As well, it's also clear that I didn't go to school in the US; such an education would never be possible with the limited budgets we give to schools.

June 27 2012 at 10:53 AM Report abuse rate up rate down Reply
nyhowie77

years ago we bought an extra warranty for a car stereo they installed.which when we hit the brake pedal the lights went out when the radio was on..great job...we brought the car back in and they said"ohh that installer did it"! typical .after 2 more times we brought it back the store manager said do not come back here anymore.I said the waranty says for as long we own the car it is warrantied..he ignored that..so i went to small claims court filed a claim the day before i get a call from main office of BB what will it take to settle out of court..I said I would love for the store maager to sit in court for a few hours ..but then decided to take the check they fed-exed the next day..I said does every warranty owner have to file a claim to get satisfaction? for 5 years I have not bought a thing in that store.bye bye BB

June 27 2012 at 10:03 AM Report abuse rate up rate down Reply
digitalmag

How would making Best Buy a private company solve the problems that it faces as the retail landscape changes?

I believe that the way in which retail stores operate has to change in a very fundamental way. Currently the brick and mortar stores are being used by customers as showrooms for the products they buy on the internet. Maybe manufacturers need to start paying a display, or demonstration fees. In effect, store will become more like continuous trade show rather than a place where you buy things. Maybe they should even promote internet shopping by customers by providing free WiFi or computers with internet connection to make purchases, with a small service charge for computer use or providing a delivery point.

It's a tough situation, but the first retailer to figure it out will survive and the rest may not.

June 27 2012 at 9:58 AM Report abuse rate up rate down Reply