Struggling electronics giant Best Buy sank deeper into the mud on Tuesday, when it reported that its second-quarter profit had fallen by 90 percent compared to last year, largely due to weak sales. The blow came a day after the company, which has been losing customers to Amazon and other online rivals, announced that Hubert Joly, chief executive of hospitality company Carlson, would take over as CEO and lead a turnaround effort. Joly is a specialist in fixing troubled companies, but many investors, disappointed by his lack of retail experience, ran scared, sending Best Buy stock tumbling by 10 percent. Is Joly the right man for the job?
Joly can't fix Best Buy: Best Buy's problem is that its sales are in a tailspin, Michael Pachter of Wedbush Securities tells The New York Times. Joly's resume is packed with jobs in the media, technology, and hospitality industries — his "experience in U.S. retail is virtually nonexistent." He might know how to turn around companies that run hotels, but he's the wrong guy "to engineer a turnaround at Best Buy."
"With new chief, Best Buy tries to set its own turnaround"
But his turnaround expertise is what the company needs: The people giving up on Best Buy "even before Joly lands in the corner office are being too hasty," says Lydia Dishman at Forbes. He executed a strategic plan and turned things around in his last job at Carlson, which owns hotels and T.G.I. Friday's restaurants. Joly knows that "customer service is everything" in hospitality, and it might get Best Buy's sales humming again, too. Best Buy needs "a really fresh perspective," and Joly has it.
"Wanted: Time for Best Buy's CEO to wield his turnaround expertise"
Joly is too late to save Best Buy: No matter how good Joly is, he's "too little, too late," says Suzanne McGee at MSN Money. People no longer go to the electronics retailer's 1,000-plus costly showrooms to purchase the hottest new gadgets — they simply go there to check out the plasma TV in person, then go home to buy it cheaper online. Watching Joly try to save Best Buy will be "like watching a slow-moving train wreck."
"Best Buy, take the Schulze deal"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- Watch out, China — America is working on dogfighting drones
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- 43 TV shows to watch in 2014
- How liberals are unwittingly paving the way for the legalization of adult incest
- How the Simpsons/Family Guy crossover revealed the worst of both shows
- Why the Chinese military is only a paper dragon
- The troubling persistence of eugenicist thought in modern America
- 6 things the happiest families all have in common
- Why America won't have enough money to battle ISIS
- Libertarianism's terrible, horrible, no good, very bad idea
Subscribe to the Week