Photo: Associated Press
Today, Best Buy announced it was bringing in a new CEO, Hubert Joly. Joly doesn’t have experience in electronics or retail, but he helmed a successful turnaround at Carlson, a hospitality company.Best Buy has fallen on hard times in recent years. Facing competition from Amazon, the electronics retailer is trying to figure out how to avoid becoming a permanent showroom where people test and don’t buy.
In recent months, the chain has announced layoffs and lost its CEO to a scandal involving an inappropriate relationship.
Investors are disappointed about what Joly’s hiring means for the long-term future of the company and premarket shares are down, said Brian Sozzi, an analyst at NBG Productions. Here’s what he has to say about the new CEO:
“The market likely will be disappointed in the hiring of a hospitality chief as CEO in what is a critical juncture for an electronics retailer. I wonder about the selection process and whether Best Buy was too eager to land a permanent person to go alongside its new restructuring plan (and shed the “interim” title attached to the former individual keeping the seat warm).“
The opposing argument is that Joly is very experienced at turning around companies, since he succeeded during his tenures at places like Vivendi and EDS. Still, the retail world is foreign to him.
Best Buy’s restructuring plan includes aggressively expanding Best Buy Mobile stores and closing big-box stores. Considering Best Buy’s struggle to be relevant, hiring a CEO outside of the retail and electronics space seems counterintuitive.
Joly might make Best Buy more efficient, but the retailer desperately needs to prove that it is relevant to consumers. And right now, the market isn’t sure if Joly is the right person for the job.
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