By Christina Cheddar Berk, News Editor NEW YORK ( CNBC) --It's going to take more than a new CEO to fix Best Buy'sproblems, but at least it's a start. At best, it's a signal the board is getting ready to be more aggressive about shaking things up and reinventing the brand. Although Best Buy ( BBY) shares popped after the news broke that Brian Dunn resigned and a search for a new CEO is underway, the euphoria was short-lived and Best Buy shares have since retreated. That is likely an acknowledgement of the tough task ahead. "They need a new, strong operating CEO to help come in and do some radical things to make some changes," said Joe Feldman, assistant director of research at Telsey Advisory Group.
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"As Jack Welch once said, if you are going to be in a business that is being cannibalized, it is better to cannibalize yourself first," Johnson said. But finding the right person to take the helm will be a challenge. It's a pivotal time in retail. Best Buy isn't alone in trying to figure it out. Eddie Lampert, founder of ESL Partners, which controls about 60 percent of Sears Holdings ( SHLD) recently told CNBC, retailers need to adapt or die. Lampert has been struggling revive Sears. Ron Johnson, who pioneered the concept of the Apple retail store and Genius Bar, is attempting to rethink JC Penney ( JCP). Even Wal-Mart Stores ( WMT), the nation's largest retailer, has opened an online research lab to test new ideas. Amazon.com ( AMZN) and Apple ( AAPL) have given Best Buy a body blow. Amazon has cornered the market for low-priced electronics that can be purchased anywhere at any time. As Brand Keys President Robert Passikoff puts it, consumers only leave home when they want to sample the product before they buy it, and that has turned Best Buy into Amazon's showroom, not an ideal situation to be in. As for Apple, they have already fulfilled the need for a unique buying experience. "The Apple Store is slim in dimension (how much space do you need for an iPod, really?) with a clean, white design scheme and trendy consumer hooks like the 'Genius Bar.' Best Buy, in contrast, is bulky, sporting an explosion of primary colors down every cavernous aisle. Really not ideal," Passikoff said. Apple's success is one reason why many analysts are saying that Best Buy needs someone like Ron Johnson to replace Dunn. "You really want someone with consumer electronics experience who has been able to transform a dated retail concept and bring that into the next century," said Johnson, of Customer Growth Partners. But Johnson sees a hint of what may be to come for Best Buy. Last month, the retailer hired former Starbucks ( SBUX) CIO Stephen Gillett to boost its ecommerce business. Gillett is credited with leading the coffee chain's digital business unit, which was responsible for Starbuck's mobile payments and developing some very engaging smartphone apps.
But Michael Pachter, an analyst at Wedbush Securities, said he's not so sure Best Buy will be able to find the right person to lead the company. "This restructuring should have started 10 years ago," he said. "...This company is going to go away within five years if they don't do something and do it soon." --Written by Christina Cheddar Berk at CNBC