Best Buy Co said Chief Executive Brian Dunn has resigned from the world's largest consumer electronics chain, which has struggled against stepped-up competition from internet retailers and discounters.
Under Dunn's tenure, which lasted less than three years, critics have complained that Best Buy became a showroom for Amazon.com and other Internet retailers, with consumers going to Best Buy stores to sample electronics like high-definition televisions, but then buying them elsewhere at lower prices.
The company has fallen short of sales expectations for several quarters in a row. Despite offering bigger discounts and free shipping to lure shoppers, same-store sales fell 2.4 percent in the latest quarter, including a 2.2 percent decline at U.S. stores open at least 14 months.
I hate to be rude, but I think he (Dunn) was doing a terrible job. This is a company that had a sales guy in charge, and I just don't think they are well positioned to deal with the onslaught from the Internet, said Michael Pachter, analyst at Wedbush Securities.
They have a big disadvantage to the Internet retailers because they have a big cost structure. So they need a guy who can fix that rather than trying to sell more stuff.
Best Buy shares rose 10 cents to $22.75 in morning trade on the New York Stock Exchange. The stock is down more than 31 percent since Dunn became CEO, compared with a 52.9 percent increase in the Standard & Poor's 500 index.
In March, Best Buy announced plans to close 50 of its 1,100 big box stores and cut 400 corporate and support jobs, moves critics said were a step in the right direction but not strong enough.
Dunn started at Best Buy as a sales associate in 1985 and rose through the ranks to become CEO in June 2009.
Best Buy said director Mike Mikan will serve as interim CEO while it looks for a permanent replacement for Dunn. Mikan, who will remain on the board while serving as interim CEO, has been a Best Buy director since April 2008. He formerly served as executive vice president and chief financial officer of UnitedHealth Group Inc.
There was mutual agreement that it was time for new leadership to address the challenges that face the company, Best Buy said in a statement on Dunn's departure.
Richard Schulze, the founder of Best Buy, continues to serve as chairman, the company said.
(Reporting By Dhanya Skariachan and Mihir Dalal. Writing by Brad Dorfman,.; Editing by Gerald E. McCormick)