NEW YORK — Best Buy Chief Executive Officer Brian Dunn is stepping down from the nation’s largest consumer electronics retailer, a company criticized by some analysts for not responding quickly enough to competition and the changing shopping habits of Americans.
Best Buy Co., based in Minneapolis, said Tuesday that the decision is mutual, and that there were no disagreements with Dunn on any matter relating to operations, financial controls, policies or procedures.
But Dunn, a 28-year veteran of Best Buy, had been CEO and director since June 2009, and the company said it is time for new leadership.
Best Buy already has created a search committee to identify and choose its new CEO. Board member Mike Mikan, 39, will serve as interim CEO while the company searches for a permanent replacement. Richard Schulze will continue as chairman.
Best Buy’s shares fell $1.33, or 5.9 percent, to close at $21.32 after initially climbing higher on the news.
“I think the departure is long overdue,” said Brian Sozzi, chief equities analyst at NBG Productions, an independent research firm. “Best Buy’s operational strategy has been way off the mark and late to address the fundamental industry upheaval.”
The news comes as the pioneer of the big-store consumer electronics retailing format struggles to regain its footing. Best Buy lost $1.23 billion in the last quarter, and revenue at stores that have been open for at least a year, a key metric, dropped 1.7 percent for the year after having fallen 1.8 percent in the prior year.
The company has been hit hard by a number of factors. Once the bread-and-butter of electronics retailers, sales of televisions, digital cameras and video-game consoles have weakened. Meanwhile, sales of lower-margin items such as tablet computers, smart phones and e-readers have increased. At the same time, Best Buy, like other retailers, is finding that more people are using its stores as a showroom to browse for products and then buying online at a lower price.
As a result, Best Buy is trying to become nimbler and avoid the fate of former rival Circuit City, which liquidated its business in 2009. A couple of weeks ago, Best Buy, which has about 1,400 stores in the U.S., unveiled a restructuring plan that calls for it to close 50 of its big U.S. stores, open 100 smaller stores and cut $800 million in costs over the next five years.
The plan comes after Best Buy has made some inroads in the past year. The company has cut its square footage by 15 percent in about 43 stores. It did that by either subletting the space to other merchants or giving it back to the landlords.
But some analysts say Best Buy hasn’t moved fast enough to reduce its footprint. They also say there are more opportunities for Best Buy to take advantage of its mobile business.
Gary Balter, an analyst at Credit Suisse, said Best Buy’s mobile business accounts for nearly one-third of the retailer’s profits yet it accounts for less than 10 percent of the overall square footage.
Meanwhile, Dunn, a 50-year-old who started his career at Best Buy as a store associate, said he believes Best Buy is well-positioned.
“I leave it today in position for a strong future,” Dunn said in a statement.
Business, Pages 23 on 04/11/2012