Founder of troubled electronics retailer Best Buy is aiming to make the company private again. Richard Schulze is looking at buying back the company’s shares for $9 billion. He already has a 20% stake in the company.
Schulze has said that his decision is based on the fact that Best Buy needs ‘immediate and substantial changes’. He has also expressed confidence that the deal with be successful. Best Buy however, has said that it will comment ‘in due course’. The company’s stock has leapt at the announcement, recording a 13.3% jump in New York.
Best Buy faces stiff competition from online channels like Amazon. It posted a $1.2 billion loss for the year that ended this March. This was the first annual loss since 1991. The company has already shut 50 stores in USA and cut 2400 jobs.
Schulze’s decision adds to the unfolding drama surrounding Best Buy, which has been hit by financial difficulties as well as internal scandals. Schulze served as the chief executive for 36 years. However, he had to step down as the chairman after a scandal surfaced in April 2012 that then CEO Brian Dunn was in a relationship with another female employee. The board cam down heavily on Schulze, who had failed to act when the matter was made known to him. Following the exit of Dunn, Schulze also resigned from his post.
Best Buy, which is also the world’s largest electronics retail store chain, has been languishing for some time. The company’s major setback had come in 2008, when it made a misguided attempt to open stores all across UK by making a $1 billion investment in Carphone Warehouse. When the scheme failed, Best Buy had to close some major stores in UK.