Best Buy Dips as CEO Resigns (Update 1)

Updated from 10:17 a.m. EST to provide analyst comments regarding CEO departure and poll results in the fifth and sixth paragraphs.

MINNEAPOLIS ( TheStreet) - Best Buy ( BBY) shares are dipping following the resignation of the retailer's CEO, Brian Dunn.

Both Dunn and the Minneapolis-based electronics retailer said in the press release that Best Buy needed new leadership "to address the challenges that face the company." Director G. Mike Mikan has been named interim CEO to lead the company while it searches for a new CEO.

"I have enjoyed every one of my 28 years with this company, and I leave it today in position for a strong future. I am proud of my fellow employees and I wish them the best," Dunn said, in the press release.

The company has come under pressure in recent years as rival Amazon ( AMZN) has taken market share. Best Buy recently posted fourth-quarter results that missed Wall Street's revenue forecast. It also announced the closure of 50 of its U.S. stores in fiscal 2013 as part of a plan to cut $800 million in costs by fiscal 2015.

In late 2011, 34.8% TheStreet readers said that Dunn should be fired. Dunn had been unable to revitalize the company, despite its biggest rival, Circuit City, filing bankruptcy.

Raymond James analyst Dan Wewer said he was not surprised by the move, but rather the timing of it. He thought Best Buy's founder and chairman, Dick Schulze, was firmly behind Dunn, and had continued to show his support for Dunn, as indicated by a recent report. "It remains our opinion that Best Buy has moved too slowly to address issues such as growing competition from e-commerce retailers (i.e., Amazon) and subpar execution in its retail stores. It is our experience that changes at mega retailers tend to take place at the speed of a glacier," Wewer wrote in his research report. He rates Best Buy "market perform."

Shares of Best Buy were down sharply in Tuesday trading, off 4.4% to $21.65.

Interested in more on Best Buy? See TheStreet Ratings' report card for this stock.

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-- Written by Chris Ciaccia in New York

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