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The Best Buy Conspiracy Theory

Stocks in this article: BBY AMZN EXPE

Here's My 'Conspiracy Theory'

The recent optimism at Best Buy will end short-lived. The company has cut costs to the point where it can't possibly get away with cutting much more. As its new price match philosophy kicks in, margins will erode. BBY's pre-dead cat bounce colors will show.

Founder Richard Schulze is hungry to regain control. He has what's being called little more than a symbolic board seat -- Chairman Emeritus. But he was able to appoint two voting members. Schulze selected two of the losers who oversaw the company's decade long butt-kicking to (AMZN) -- former BBY CEO Brad Anderson and former COO Al Lenzmeier.

Interestingly, Anderson showed up on CNBC the other morning giving current Best Buy CEO Hubert Joly another vote of confidence.

But the reemergence of Anderson and Lenzmeier begs the question: Why put two former executives on the board if you have so much faith in Joly? Nobody at Best Buy is willing to provide a satisfactory answer to that question. Instead, they brand my overall premise "conspiracy theory" and point to other executives, such as former Expedia (EXPE) President Scott Durchslag, as examples of fresh and innovative blood.

But what exactly does Best Buy have a guy like Durchslag doing that resembles anything innovative? Don't get me wrong. Durchslag's the real deal, which means he absolutely must be doing everything in his power to bail from the sinking ship just like the guy who hired him did.

There's zero innovation at Best Buy. No secret plan that I know of. Renew Blue, as they optimistically call it, is little more than an assemblage of old retail tricks Best Buy never practiced or has decided to kick up a notch. This pseudo-strategic plan does nothing to materially -- or even cosmetically -- transform the notion of what it means to be a retailer or, on a smaller scale, a consumer electronics big box.

Price matching. Customer service specialists. Stores within stores. What's new or innovative here?

Expect things to get tough in the coming quarters. Watch more of the good talent left at Best Buy leave. And see the slow coup -- hardly a conspiracy theory -- take shape. Richard Schulze has put himself in a position to move Joly out and put his people, quite possibly from the Best Buy good old boys' network, in.

Call that line of thinking a conspiracy theory all you want. But, as a BBY bull or somebody at the company -- supposedly giddy about future prospects -- you'll help yourself quite a bit more by offering different and concrete rhetoric.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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