MINNEAPOLIS — Best Buy Chairman Richard Schulze resigned Thursday from the board of directors, paving the way for the company's billionaire founder and largest investor to take the struggling electronics retailer private, with new owners and management.
"I continue to believe in Best Buy and its future and care deeply about its customers, employees, and shareholders," Schulze said in a statement. "There is an urgent need for Best Buy to reinvigorate growth by reconnecting with today's customers and building pathways to the next generation of consumers. Accordingly, I have shared my view with the board and today informed it of my (resignation) ... in order to explore all available options for my ownership stake."
Schulze's early exit, coming just two weeks before he was to relinquish his chairmanship at Best Buy's annual shareholders meeting and one year before he was to step down from the board, added fresh drama to what has been one of the most tumultuous years in the company's history.
Last month, an investigation by the board's audit committee determined former chief executive officer Brian Dunn had an inappropriate relationship with a female employee. The board also concluded Schulze knew of the relationship in December but failed to inform them. As a result, Schulze agreed to step down as chairman this month in favor of board member Hatim Tyabji and resign from the board entirely in 2013.
Schulze now appears to have second thoughts. Former executives and analysts say Schulze, even in retirement, was always going to exert some influence at Best Buy, given his nearly 21 percent ownership stake and close relationships he still enjoys with people throughout the company.
For Schulze to successfully take the company private, he must overcome two big challenges, said Jeremy Brunelli, an analyst with Consumer Edge Research in Stamford, Conn.
Investors will want to know how much influence, if any, Schulze would exert in a reconstituted Best Buy, he said. Analysts mostly viewed Schulze's departure as a positive move, given his close relationship to Dunn and his perceived reluctance to embrace change and make tough decisions.
The second challenge is money. For Best Buy to go private, Schulze and his backers would need to offer investors at least $30 a share, or $12 billion, Brunelli estimates. It's unclear if private equity investors can raise such money given the volatility of the global economy.