Best Buy’s new CEO designed the retailer’s revival
In naming Corie Barry to the chief executive job, Best Buy Co.’s board is handing the reins to the architect of the retailer’s current growth strategy, widely considered to be one of the industry’s most remarkable turnarounds.
Barry, chief financial and strategic transformation officer, will replace Hubert Joly in June after almost seven years at the helm.
In her outgoing role, Barry oversaw the company’s expansion announced in 2017, a rare consumer success story in the age of Amazon. The plan found new revenue streams, including an in-home advisory program to help customers with any tech-related issue.
The Barry-led push into services has helped Best Buy buck the trend of legacy retailers succumbing to the shift online. During the holiday-shopping season, the chain again topped expectations when many peers struggled. Selling more services, warranties and accessories around a gadget, such as smart-home lighting, increases margins, which has been key to Best Buy’s revival, said Craig Johnson, president of retail researcher firm Customer Growth Partners LLC.
“They make as much money around the product as the product itself,” Johnson said. “They’ve done an excellent job on that.”
Barry, who will turn 44 this week, has spent nearly her entire career at Best Buy, working her way up the finance side of the business. She replaces Joly, who will remain with the company as executive chairman and maintain an office across the hall from Barry, whom he has mentored for several years.
“The transition makes sense at this point because it’s good to do this from a position of strength,” said Jonathan Matuszewski, an analyst for Jefferies. “It’s also a positive that Hubert’s not going anywhere.”
Still, investors showed some caution about the change, with Best Buy shares falling as much as 1.2% to $72.70 on Monday. Through Friday’s close, the stock had advanced 39% this year, more than double the S&P 500’s gain over the same period.
Joly, 59, arrived at a chaotic Best Buy in 2012 when the retailer looked headed for irrelevance, or worse. Former Chief Executive Brian Dunn had resigned after having a relationship with a subordinate. Meanwhile, founder Richard Schulze was sparring with the board and trying to buy the company as Amazon.com Inc. was stealing market share.
In walked Joly, an outsider from the hotel industry. He and his team revived the world’s largest electronics chain with a focus on improving customer service and strengthening relationships with key vendors including Apple and Samsung.
The company also promoted Mike Mohan, another veteran who’d also been considered a leading candidate to replace Joly, from U.S. chief operating officer to president and chief operating officer. Best Buy will search to fill the role of chief financial officer. Barry will also join the board, giving the retailer a majority of female directors.
Despite early hiccups and a sagging stock price, Joly maintained a long-term view. He wanted to cut costs and invest in technology. He also rewired the company’s culture to focus on customer service. In conference calls with investors, he’d talk as much about gains in shopper satisfaction as revenue growth. By 2017, Joly declared the turnaround was over and the company would shift toward ramping up growth, a task he charged Barry with seeing through.
“Best Buy was on a descent unless someone applied the brakes, turned it around and applied the accelerator, and that’s exactly what he did,” Johnson said. “Almost everything he did was spot-on.”
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