For Best Buy, “the connected world is not a...
For Best Buy, “the connected world is not a strategy to simply sell more stuff,” but an effort to capitalize on “a fundamental shift in human behavior” by capturing significant share of a $325 billion market for connectivity products and…
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
services, CEO Brian Dunn told the shareholder meeting Thursday. “People across the world have an almost insatiable desire to stay connected to the things they care about.” In Q-and-A, one shareholder challenged Dunn to explain why he should hold on to his Best Buy stock despite it having lost 20 percent of its value since he bought it 15 years ago. “If you think innovation around us is slowing, then I don’t think we're a great bet,” Dunn responded. “But if you believe as we do that innovations are going to keep coming and accelerate … we're a great bet.” He thinks Best Buy shares are “significantly undervalued,” he said. Another shareholder asked Dunn what Best Buy had done to “eradicate” the threat of again being defrauded as it was in a case she said had recently dominated Minneapolis newspapers. Dunn identified the case as that involving a company called Chip Factory, which supplied computer replacement parts. A federal jury earlier this month convicted an Illinois couple for conspiring with a former Best Buy employee to defraud the chain of more than $41 million through its online “reverse auction system” called the “parts procurement network,” according to a July 2009 indictment. “We were making purchases from a fraudulent vendor supplier,” Dunn said. “The company unfortunately was defrauded and it cost us some money.” As a result, “we have had a deep scrub over the last 18 months of all the processes and the personnel around this business,” Dunn said. “We are not very proud of” the Chip Factory case, he said. “We have audited, sort of unilaterally, our vendor relationships in that category, and we're very confident that we have repaired what was a broken system.” He accused some newspapers of sensationalizing the story, but conceded the $41 million was “a significant amount of money.” Still, “if you put that through the context of $50 billion going through our P&L, there’s never an excuse for it, but essentially there was a breakdown in the checks and balances around that piece of our business. We have made the appropriate personnel decisions and the appropriate systems and processes updates, and we're very confident we won’t [again] be defrauded in that space in that way.”