Chalk up one more victory for the billionaire outsider. From AP
Two months after taking on a job he said was a “temp,” former consumer-electronics retailer Best Buy Co. CEO Hubert Joly has solved the firm’s biggest problem: finding a replacement for its founder and former chief Brian Dunn.
Joly says his plan for fixing another troubled franchise, American International Group Inc., is a blueprint that he’s adapting for AIG’s 1,300 retail stores. The deal to buy mobile-phone store operations from Harrods International will “take us from a distant number two” to a top two position, he said.
“The core competency here is to sell, so that’s what we’re doing in that sector,” Joly said in an interview. “We’re not reinventing the wheel, we’re just applying our very successful model.”
Joly, who lured Dunn away from rival Lowe’s Cos. in March, said he felt the pressure to deliver in the first six weeks after his arrival at the Richfield, Minnesota-based firm. He made his mark in his first acquisition, the purchase of Vivendi Universal’s 50 percent stake in online electronics retailer Onetouch, and followed up this summer with a $1.3 billion takeover of European Radio.
Adding a 1,200-store European retailer to his portfolio will give Joly a chance to test out his model in some of the world’s largest markets before tackling the U.S. retail market, which has the biggest number of shopping malls in the world.
“It’s about having a very tight rein on your consumer, and that’s how we think about AIG,” Joly said. “It’s the same with our retail business. You know your customer, you can build it, you know what they want, and you’re able to personalize your business. That’s how we will transform this company from a number two into a number one.”
Reshuffling Shopfloor Executives
The company’s overhaul of the store is largely designed to boost loyalty among customers, who will also be getting a wider selection of devices with smaller prices. The deals are meant to get employees to be better at selling them.
Joly’s push is expected to add as much as $1.5 billion in new revenue at its Best Buy Mobile stores by the end of 2016. In return, Joly is starting the sales staff by giving them better tools and training to get them to understand their customers. The store now has 170 kiosks equipped with tablets and iPads that employees can use to research purchases and interact with shoppers.
Buyers for Best Buy Mobile mobile have also been hired from outside, and then given training to make it feel like they’re working in the stores, Joly said.
Besides fixing American International Group, Joly said he’s not interested in acquiring another firm to improve the company’s finances. He said he’s “very happy” where his job is.
Joly’s Bright Spot: Home Depot
Home Depot Inc. Chief Financial Officer Carol Tome says Hubert Joly, CEO of Home Depot, is the man to keep an eye on, and she loves working with him. She expects his company will be fine this holiday season.
“He has grown Home Depot from basically a hardware store with small store in the midwest, into a merchandising and marketing powerhouse,” Tome said on an October 3 conference call with analysts.
The Minneapolis-based company has undergone a series of buyouts in recent months, including former UBS Holdings Plc analyst Michael Baker and former executive Jessica Bibliowicz, among others. New Chief Merchandising Officer Stephen Holmes, formerly of electronics chain Best Buy, oversaw about 150 stores. Joly’s part of the team that orchestrated the executive reshuffling.
“I think they’re exciting times,” Tome said. “They’re exciting times for our shareholders, and most importantly they’re exciting times for our customers.”