Best Buy Co. Interim Chief Executive Officer Mike Mikan told employees today that his first priority is to execute the changes the company announced last month and then he will plan a new direction for the retailer.
Mikan made the statement in a video for employees. He said the company first needs to implement the cuts announced by former CEO Brian Dunn in March, which included eliminating 400 corporate jobs and closing 50 big-box stores. After that, Mikan said he wants to work on a new vision for Best Buy.
Mikan is working to galvanize employees after the Richfield, Minnesota-based company posted a quarterly net loss of $1.7 billion and Dunn’s resignation amid a board probe into “personal conduct.” Best Buy is struggling to compete with online rivals such as Amazon.com Inc. and Apple Inc.
“In the days and weeks ahead, I’ll be working with our leadership team on a long-term vision, a path toward the future that will connect Best Buy with customers across multiple channels while improving performance,” Mikan told employees in a video that was released by the company.
Best Buy fell 0.3 percent to $22 at the close in New York. The shares have declined 5.9 percent this year.
Dunn left the company on April 10. The board was investigating whether he may have misused company resources while having an inappropriate relationship with a 29-year-old female subordinate, according to two people familiar with the matter.
Mikan, in the video, talked about creating multiple channels for sales and improving the company’s online presence.
Future of Retail
“We need to ask ourselves what Best Buy will be in the years ahead,” he said. “We need to create a dynamic relationship that transcends the store experience.”
Finding its role in the future of retail is the company’s top challenge right now, said Ken Harris, a consultant with London-based Kantar Retail. The company is under pressure from Internet retailers in some of its main product lines, especially electronics. Best Buy needs to branch out and sell more products and services, he said.
“The name itself tells you that it doesn’t have to be limited to electronics,” Harris said in a phone interview. “It could be accessories, it could be service, it could be many things. This isn’t about waning financial performance. It’s about getting back momentum.”
Mikan didn’t specify what direction the retailer will take. He did indicate that he will play a key role in its formation.
“You can count on me to bring passion and commitment to this effort,” he said.