Best Buy Co. hired former Williams-Sonoma Inc. Chief Financial Officer Sharon McCollam as CFO as the world's largest consumer-electronics retailer seeks to reduce its store count and strengthen its online operations.
McCollam, 50, starts Dec. 10 and also will serve as chief administrative officer, Best Buy said today in a statement. She retired from Williams-Sonoma in March. Jim Muehlbauer, Best Buy's current finance chief, said last month that he would step down from the role.
Chief Executive Officer Hubert Joly is hiring McCollam as he works to boost sales while reducing store space amid intensifying online competition. Joly, who took charge in September as the company resisted buyout overtures from founder Richard Schulze, is meeting with analysts tomorrow in New York to discuss his strategy to revive the retailer.
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"The board does not appear to be standing still in terms of driving the business forward," Greg Melich, an analyst at International Strategy & Investment Group in New York, said today in a note. He rates Best Buy hold.
Best Buy rose 3.6 percent to $15.85 at the close in New York. The shares have fallen 32 percent this year.
McCollam said she plans to bring the financial, operational and multichannel skills she developed at Williams-Sonoma to improve Best Buy's profitability. The retailer controls 16 percent of U.S. consumer electronic sales in a "very highly fragmented market," with about half of the market served by competitors with less than 4 percent of sales, she said.
"Realistically we are the only place you can go at retail or online to buy virtually any consumer-electronics product or service," McCollam said in a telephone interview today from Richfield, Minnesota, where Best Buy is based. "We are getting the opportunity by these customers coming into our stores to serve them."
While at Williams-Sonoma, McCollam helped reduce the San Francisco-based home-goods retailer's square footage 7 percent from 2008 to 2011 while boosting sales 11 percent, Melich said.
Williams-Sonoma started several e-commerce websites while McCollam was CFO and chief operating officer and improved its supply chain, said Anthony Chukumba, a BB&T Capital Markets analyst in New York. He speculated in June that McCollam was a leading contender to become Best Buy's CEO.
'Major Step'
"Sharon McCollam's hiring is a major step in the right direction for Best Buy, as we cannot envision anyone better suited for the challenges the company faces," Chukumba wrote today in a note. He rates the shares hold. "She is experienced in shrinking a retail store base and developing a higher-margin e-commerce distribution channel — two of Best Buy's most pressing needs."
Best Buy posted a $1.2 billion net loss in its latest fiscal year and said Oct. 25 that fiscal third-quarter profit will probably be "significantly" below last year's results as sales at established stores decline.
Schulze, who resigned as chairman in June, offered to take the company private at $24 to $26 a share two months later. Schulze, 71, later reached an agreement with the company on conducting due diligence on a possible deal.
Bloomberg News
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