--Sharon McCollam comes out of retirement to take top financial
spot
--Her experience in e-commerce, shrinking retail footprint
important for company
--Shares rise on news, which analysts characterize as Buy Buy
victory
(Updates with further comments from CFO, analysts and
search-firm executive starting in the 10th paragraph)
By Joan E. Solsman
Best Buy Co.'s (BBY) new chief financial officer, Sharon
McCollam, has no illusions about the struggling retailer's
challenges in e-commerce or any doubts it can overcome them.
The 12-year veteran of upscale home-furnishings retailer
Williams-Sonoma Inc. (WSM), who retired in March, told Dow Jones
Newswires Monday that she came back to the executive suite to be a
part of what will be "one of the most exciting and important retail
transformations of the decade."
Ms. McCollam is the most high-profile appointment at the company
under new Chief Executive Hubert Joly, a turnaround specialist
hired earlier this year to revive its long-slipping sales. Best Buy
and its big-box model have struggled to keep pace with a market
that has transitioned rapidly to online selling.
But she said the successful retailer in this new iteration of
the consumer-electronics market must be a marriage of "bricks and
clicks."
Shares in the world's largest consumer-electronics retailer were
up 4.3% at $15.96 in recent trading Monday on the news of her
appointment, which is effective Dec. 10.
Ms. McCollam is well-regarded for her success at
Williams-Sonoma. In notes to clients, BB&T Capital Markets
analyst Anthony Chukumba called her appointment "a major coup,"
while Janney Capital Markets analyst David Strasser said it was a
"big win."
She brings Best Buy extensive experience in online retailing
from Williams-Sonoma, which last fiscal year derived 38% of its
revenue from e-commerce. She also helped usher that company through
a period of store rationalization, as it shrunk its base after
overexpanding before the recession.
Ms. McCollam conceded Best Buy has been slow to capture its
share of the online market. The company, the world's 11th largest
online retailer, "should be much bigger than that," she said.
However, her experience from Williams-Sonoma is with merchandise
that is often unique or exclusive, while Best Buy's is commoditized
and easy to comparison shop online. It is an environment that has
fostered "showrooming," the practice of examining a product in a
store only to buy it elsewhere online for less.
Ms. McCollam said Best Buy has a price-perception problem rather
than realistic price disadvantage. She noted that about 15% of
people who visit the company's stores have an intent to buy online,
which represents traffic Best Buy has the opportunity to
convert.
Among her ideas to improve Best Buy's standing are to take
advantage consumer electronics' highly fragmented market and to
leverage its large customer-help capacity.
The challenge for Best Buy, however, is providing a level of
product expertise similar to that of an Apple Inc. (AAPL) store but
for a vast assortment. Ms. McCollam said she believes investments
in employee training will make Best Buy "a rival to even the
best."
"We really are the first place you can go to get any consumer
electronics product that you need and get advice on it," she said.
"We will be more successful because there's nothing out there like
this."
Last month, the company announced Jim Muehlbauer would be
leaving the company, one of several major management changes
recently as Mr. Joly shows his interest in shaking up Best Buy's
status quo.
Best Buy hired executive search firm CTPartners to lead its CFO
hunt. In an interview, CTPartners Vice Chairman Umesh Ramakrishnan
said Ms. McCollam quickly rose to the top of a wish list for the
spot, which he described as "a very, very small list of candidates
that can be or should be CFO and CAO" given Best Buy's large size
and special needs.
Wall Street applauded the move. BB&T Capital's analyst Mr.
Chukumba noted her "tireless work ethic, unparalleled operational
and financial acumen and encyclopedic industry knowledge." However,
he added the hiring doesn't necessarily mean a leveraged buyout is
less likely.
Company founder Richard Schulze is marshalling financial support
for his bid to take Best Buy private. It's a prospect that analysts
say is unlikely but nonetheless less difficult to achieve following
a recent deterioration in share value.
However, Janney's Mr. Strasser said Ms. McCollam's appointment
"could serve as a pretty aggressive counter to any bid for the
company."
--Maxwell Murphy contributed to this article.
Write to Joan E. Solsman at joan.solsman@dowjones.com
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