NEW YORK (AP) — Best Buy Co. CEO Brian Dunn has resigned from the nation’s largest consumer electronics retailer, which has been struggling to rebound amid growing competition and changing shopping habits.
Best Buy, based in Minneapolis, said Tuesday that it was a mutual decision, and that there were no disagreements with Dunn on any matter relating to operations, financial controls, policies or procedures. But the company noted that it was time for new leadership given the challenges facing the company.
Best Buy said that it has already created a search committee for identifying and choosing its new CEO. Board member and University of St. Thomas alumnus Mike Mikan, 39, will serve as interim CEO while the company searches for a permanent replacement. Richard Schulze will continue as chairman.
Best Buy stock gained 52 cents, or 2.3 percent, to $23.17 on the news.
Dunn, 50, who is a 28-year veteran of Best Buy and started his career there as a store associate, had been CEO and director since June 2009.
“I have enjoyed every one of my 28 years with this company, and I leave today in position for a strong future,” Dunn said in a statement.
The announcement comes a little less than two weeks after Best Buy unveiled a restructuring plan. The chain plans to close 50 of its U.S. big-box stores, open 100 small-format stores and cut $800 million in costs over the next five years.
The closings came as Best Buy released financials that showed the company lost $1.23 billion or $3.36 per share for the year ended March 3. That compared with a profit of $1.28 billion, or $3.08 per share in the prior year. Annual sales rose 2 percent to $50.71 billion. Revenue at stores opened at least a year, a key metric, fell 1.7 percent for the year, after having fallen 1.8 percent in the prior year.
Best Buy, whose sales have been stung by competition from online sellers like Amazon.com, is trying to become nimbler to avoid the fate of former rival Circuit City, which liquidated its business in 2009.
Sales of TVS, digital cameras and video game consoles — once the bread and butter of electronics retailers — have weakened, while sales of lower margin items like tablet computers, smartphones and e-readers have increased. Meanwhile, Best Buy along with other big-box retailers, is finding its huge stores are looking outdated as more people use them as showrooms to browse for products and then buy at a lower price on online rivals’ sites.
Last week, credit ratings agency Standard & Poor’s put its corporate credit rating and other ratings on watch for a possible downgrade, saying at the time that the company’s restructuring plan “underscores the problems that Best Buy is having with its current business model.”