Source: The Wall Street Journal
Best Buy Co. executives sought to assure investors at its annual meeting that it has a turnaround plan, telling shareholders Thursday it will provide better training for workers and expand technology services to businesses.
Interim CEO G. Mike Mikan acknowledged the electronics retailer has been slow to recognize threats to its business, like the rise of "showrooming," where customers check out merchandise in stores before buying it elsewhere from online rivals such as Amazon.com Inc.
"Ending this trend is our No. 1 priority," Mikan told investors during the meeting at Best Buy's Richfield, Minn., headquarters.
While Mikan and other executives offered more promises than details, Best Buy vowed to set itself apart from the competition by investing in improved customer service. The retailer said it has increased its training budget and expects to intensively train 50,0000 workers, more than a third of its sales force, between September and the start of the holiday season.
With a lack of innovative new products to replace old best sellers such as flat-screen televisions, Best Buy also reaffirmed plans to expand its services business to boost revenue, targeting businesses as well as individuals.
Mikan said Best Buy recently signed a large tech services contract with an unnamed company, but declined to offer details. The retailer also purchased White Glove Technologies LLC, an Austin, Texas services company, earlier this week for undisclosed terms.
Wall Street analysts said Best Buy has already tried to expand technology services to business, without much success. "It always seems to be the next big thing, but never happens," said David Strasser, retail analyst with Janney Montgomery Scott.
The business-focused meeting was a departure from the drama that has beset the company in recent months. Former CEO Brian Dunn resigned in March amid a board investigation into what it concluded was "an inappropriate relationship" with a subordinate.
Company founder and leading shareholder Richard Schulze abruptly left the board as a director earlier this month and said he was exploring options for his 20-percent stake in the company.
Read More: Best Buy to boost training, services