Will Best Buy Go Out of Business?

NEW YORK ( TheStreet) -- Best Buy's ( BBY) board of directors blew it. Shareholders should demand that, to a person, they're removed and held in contempt.

The board let investors down. It let Best Buy employees down. And, from a broad perspective, it let the largely pathetic retail space down.

If it stays the present course, Best Buy will go out of business.

The company must capture the Walmart ( WMT) and Whole Foods Market ( WFM) audiences and all those in between.

But how do you create a retail environment that brings shoppers from diverse backgrounds together under one roof? And keeps them coming back irrespective of how technologically advanced society becomes?

An environment that serves low-income households; people crazy enough to camp out for a Black Friday deal; folks who, to save a couple bucks, will buy an iPad from Best Buy, forgoing the Apple ( AAPL) experience; and the well-off who drop thousands on guitars, refrigerators and home entertainment setups with a relatively carefree regularity.

An environment that makes Best Buy cool like Apple or Lululemon ( LULU), as convenient as Amazon.com ( AMZN) and as progressive technologically as Starbucks ( SBUX).

That's quite the task. And there's no way in hell Hubert Joly -- the man Best Buy plugged its CEO hole with -- can get it done.

With that in mind, I finally got around to watching Best Buy's Analyst and Investor Day Webcast from earlier this month.

The experience killed nearly all hope and optimism -- expressed here, here and here -- I had for Best Buy.

I gave Best Buy the benefit of the doubt because it hired young and tech-minded Stephen Gillett away from Starbucks where he helped pioneer the company's superior mobile and digital efforts.

For a minute, I thought Best Buy might follow in the footsteps of Yahoo! ( YHOO), who hired the youthful, aggressive and with-it Marissa Mayer as CEO.

It made too much sense. Best Buy loaded Gillett with responsibility and oversight (see my previous BBY articles for details). It flowed logically that you give the guy free reign to transform Best Buy into the type of retailer he played a key role in helping Starbucks become.

But boards, particularly in dying industries such as brick-and-mortar retail, tend to play it safe, even if well-intentioned caution means they're setting their companies up for failure.

At Investor Day, Joly read off of a teleprompter. He showed no enthusiasm and zero command of any subject that matters to Best Buy. Everything about the guy -- from the way he uses words to his body language -- makes me wonder if he owns a smartphone, knows his way around an iPad, can stop the time from flashing on his VCR or has ever made an e-commerce purchase.

In my world, we refer to guys like Joly as "out of the demo." He can't relate to the demographics represented by his own customers and combat 21st Century challenges or respond to opportunities innovators ranging from Apple to Amazon to Starbucks present.

As I watched Gillett speak after Joly, I could only think a.) Best Buy dropped the ball by not naming him CEO and b.) he will not be around much longer. Guys like Gillett cannot operate effectively with their hands tied. They tend not to work well with consultants. And that's exactly what Joly is -- a consultant who can, best-case scenario, shore up administrative minutia, the stuff that ends up taking care of itself anyway with a little bit of success.

He's not a visionary. He has no instinct for the spaces he must intimately understand. He's just not up the enormous task at hand.

Working from the same retail toolbox that has already failed the sector, Joly speaks of optimizing Best Buy's remaining tangible and intangible assets. He cannot, however, set out and implement the wholesale transformation Best Buy needs. Simply put, he doesn't belong in the same row of bar stools as guys who dictate the rules of engagement. Names such as Jobs, Bezos and Schultz.

Given Marissa Mayer-like carte blanche, Gillett can get there. He might even be able to execute the unimaginable. He could take Best Buy and morph it into something unrecognizable to itself and the average customer.

But that means he needs to be in charge, surrounded by the type of team he succeeded with at Starbucks.

I can't get past it. Why hire Gillett in the first place and then add to his job description if you did not have plans for him to become Best Buy CEO when the gig came available?

If I were a BBY long taking a drubbing, particularly on a sizable position, I would call for a shareholder mutiny and ask this inept board of directors that question along with many off-color variations of it.

The time to play nice is long gone. Best Buy has yet to pass the point of no return. But it needs to fire Joly and let Gillett drive it like he stole it by the company's next earnings report. The board might even be able to leverage some holiday quarter momentum as it explains what would hopefully be its final fit and start.

-- 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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