Best Buy Turns to Hospitality Industry for New CEO
Best Buy Co Inc. named Hubert Joly, the former head of hospitality company Carlson, as its new CEO. The 53-year old Frenchman has never worked in retail, but has significant turnaround experience in the technology, media and services sector.
The naming of a permanent CEO ends months of uncertainty following the abrupt departure in April of its prior CEO, Brian Dunn, coming just after the world’s largest consumer electronics chain unveiled a comprehensive turnaround effort.
"Hubert was an outstanding candidate for this position and I am confident he will be a great fit for Best Buy," Hatim Tyabji, Best Buy’s chairman, said in a statement. "Hubert’s range and depth of experience in transforming companies is exactly what the company needs at the moment, as is his energetic, imaginative and experienced leadership in executing strategies."
"He is a little bit older, a little bit more seasoned," BB&T Capital Markets analyst Anthony Chukumba, told Reuters. "I think this is a home run for Best Buy."
Mr. Joly drove the turnaround of the French business of EDS, which is now part of Hewlett Packard, from 1996 to 1999. He also led the restructuring of Vivendi’s video game business, including successfully tapping growth in online gaming. In the service sector, he was credited for transforming Carslon Wagonlit Travel into the leader in corporate travel management. As Carlson’s CEO, Mr. Joly strengthened its customer service sector, including its more than 900 T.G.I. Friday’s restaurants and more than 1,000 hotels that includes the Radisson franchise.
He succeeds Mike Mikan, a board member who served as interim CEO since April and had also been vying for the full-time job.
Brian Sozzi, analyst at NBG Productions, wrote in a note that investors would likely be disappointed in the hiring of a hospitality executive at a "critical juncture" for the company.
"Joly is a rogue agent," Mr. Sozzi told the Associated Press. "He comes in and fixes companies and then leaves."
Shares of Best Buy traded down 7 percent on Monday although the decline could have been caused by the weekend’s breakdown of takeover talks with founder Richard Schulze.
Mr. Schulze said on Monday he would continue to pursue his proposal to take the company private. He called Mr. Joly an "accomplished executive" but said the retailer needed a "leadership team with deep retail experience and knowledge of Best Buy."
Mr. Joly is expected to assume his new role as president and CEO in early September when his visa is secured, Best Buy said.
- Best Buy Appoints Hubert Joly Chief Executive Officer – Best Buy
- Best Buy Names Hospitality Executive as New Chief – New York Times
- Best Buy names CEO; founder still eying company – Reuters
- Best Buy rejects takeover bid, hires new CEO – USA Today/Associated Press
Discussion questions: What do you think of the hiring of Hubert Joly as Best Buy’s CEO? When does the hiring of an outsider to orchestrate a turnaround make sense? Is Mr. Joly too much of an outsider?