The world’s largest electronics chain said its board learned of concerns about CEO Brian Dunn that were “unrelated to the company’s operations or financial controls, and an audit committee investigation was initiated.”
Dunn — who joined Best Buy in 1985 as a sales associate before working his way up to CEO less than three years ago — resigned before the investigation was completed, a spokeswoman told the Minneapolis Star Tribune yesterday.
Best Buy officials declined to comment further on the probe, and Dunn couldn’t be reached for comment.
In reaction to today’s news, Best Buy shares fell to a new 52-week low of $21.21 before recovering slightly to close at $21.32, down 5.9 percent.
Dunn stepped down just weeks after he announced a turnaround plan for the company’s big-box stores that some critics said was too little, too late.
In addition to a rising threat from Amazon, critics say Best Buy has been hit by increased competition with Apple.
Last month, after reporting a $1.7 billion quarterly loss, Dunn had proposed closing 50 of the company’s 1,100 stores and accelerating the rollout of smaller-format locations geared toward sales of mobile gadgets.
But the company has been under pressure from investors who are seeking more radical change. Rather than continued growth, some analysts say Best Buy should focus more on wringing profit from the stores it already has.
“We would like to see a greater emphasis on . . . value as opposed to continued growth,” Barclays analyst Alan Rifkin said in a note to clients yesterday. “We would like to see dividend increases and greater focus on payout ratios.”
Dunn admitted in a January blog post it was “fair criticism” that the company had been too slow to react to the Amazon threat.
At the time, Best Buy disclosed its sales had declined in December after a well-publicized screw-up by the chain’s own Web operation.
The episode, in which BestBuy.com canceled Christmas orders that had been made weeks earlier because of botched inventory management, was “our fault” and “not representative of how we EVER want to treat our customers,” Dunn wrote.
Board member G. Mike Mikan will serve as interim CEO until a replacement is found.