Best Buy reported news yesterday that founder and chairman Richard Schulze is resigning early from the board. Schulze had agreed last month to step down as chairman after the company’s annual meeting on June 21 and would stay on the board for another year as a board member. In a written statement to the board Schulze said, “I have shared my views with the board and today informed them of my decision to resign as chairman and a director, effective immediately, in order to explore all available options for my ownership stake.” Schulze is Best Buy’s largest shareholder with a 20% stake currently valued at about $1.3 billion. Some analysts speculate that this move could be seen as a precursor to a private takeover by Schulze.
There is speculation that Schulze had some disagreement with the board and current management team and its strategies. Not surprising considering Best Buy recently reported a net loss of $1.2 billion in fiscal 2012 (ended March 3) compared to net earnings of $1.3 billion in the prior fiscal year. The company has had to close dozens of its large-format stores and is downsizing others to cut expenses. Fierce competition from such notables as Apple and Amazon.com is also prompting this revamped strategy. In other troubles, former CEO Brian Dunn, who resigned in April, may have had an inappropriate relationship with a female employee. See my colleague Alexandra Biesada’s post on the topic. An internal investigation alleged that Schulze had known about the relationship but decided not to report the incident to the board of directors.
As for newly appointed chairman Hatim Tyabji, he brings to the board a wealth of experience in broadband and wireless technologies. As chairman of the Audit Committee for Best Buy and a director since 1998, Tyabji has contributed to the development of the company’s technological growth and overall connected world strategy. Tyabji also has other directorships with such companies as Jasper Wireless (chairman), Merchant eSolutions, Touch Networks (Australia), and the Missile Defense Advocacy Alliance.