This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Best Buy Conspiracy Theory

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 - Get Report ) -- 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.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AMZN $507.08 0.00%
BBY $28.12 0.00%
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs