Is Best Buy The Next Starbucks Or Apple?
It’s no secret that Best Buy has been struggling of late. With competitors like Amazon, Walmart, and Costco offering lower prices, Best Buy’s sales have floundered. The company announced in March the closure of 50 stores. Shares of Best Buy closed up 2.17 percent yesterday to $20.23. Its 52-week high is $32.85.
Until 2002, Richard Schulze was Best Buy’s CEO, chairman and director for 36 years. Last month, Best Buy announced Schule would step down as board chairman in June 2012 after the company discovered he failed to inform the board about the allegation former CEO Brian Dunn had an inappropriate relationship with a female employee.
Schulze unexpectedly resigned from the board earlier this month. Since then Schulze’s has been evaluating what to do with his 20 percent stake in Best Buy. There is speculation that Schulze will move to take the company private and take control of the operation again.
So, does that put Best Buy in the same class as two of the world’s most valuable brands – Starbucks and Apple? Both companies were resurrected from near certain doom by their founders, Howard Schultz and Steve Jobs respectively.
Probably not. Schulze is 71 and has always been a proponent of the big box store format. He’s a store guy not a product guy. Both Jobs and Schultz have always been driven by the product – be it personal computing or premium coffee.
Schulze’s focus on stores is what fanned Best Buy’s growth over the years but it has also left Best Buy vulnerable in unstable economy and from lower cost online competitors.
Best Buy’s annual shareholder meeting is tomorrow but don’t look for any reason to believe that Best Buy will rise from its own ashes as Apple and Starbucks did. There is much work to be done. Best Buy is still in the talking stage. Until then things will, at a minimum, be interesting to watch.