Changes put in place by Best Buy CEO Hubert Joly and announced late yesterday were initially surprising, but upon reflection 24 hours later, not unexpected.
Joly came in as a turnaround specialist and he is doing what turnaround specialists usually do — make changes and cut costs.
He is fighting what has to be considered a multi-front war:
*maintain, if not grow, its sales during this holiday season, probably the most important in its history;
*make changes not only for the holiday season but for the future; and
*spin the expected disappointing fiscal third-quarter performance, ended Nov. 3, of lower comp-store sales and profit margins that were due to investments made in the business, so investors won’t embrace founder and former chairman Dick Schulze, who wants to take Best Buy private.
Mixed in with all of this is the retirement of Mike Vitelli, president of Best Buy’s U.S. business. The departure of Vitelli, who came to Best Buy after a successful career with Sony Electronics, may be a disappointment to many in the industry especially suppliers. They knew they had a real industry veteran at the chain who knew both the vendor and retailer sides of the CE business.
One consolation is that Vitelli, a well-respected member of the industry, will not be leaving Best Buy immediately. He will work with Joly to ensure a “smooth transition,” as Best Buy put it yesterday, and stay on until the end of the fiscal year.