Best Buy's founder never wanted to leave
May 15, 2012 (Menafn - Pioneer Press - McClatchy-Tribune Information Services via COMTEX) --Richard Schulze never intended to leave his creation.
The St. Paul native who opened his first stereo shop in 1966, then built it into the world's largest consumer-electronics retailer, wasn't interested in turning his life's work over to anyone else.
When he stepped down as Best Buy's CEO in 2002, Schulze vowed that he would remain chairman of the board "until I'm called away from this earth."
Schulze, now 71, remains on this earth, but at a board meeting on Saturday, May 12, his legendary 46-year run in as the ultimate power behind Best Buy came to an end.
Confronted with a report criticizing his failure to disclose a potentially serious CEO problem, and under fire for Best Buy's slumping stock price and perceived resistance to change, Schulze finally told the board he would step down as its chairman.
One source close to the company said Schulze didn't argue with the findings by the board's audit committee. His decision to resign as board chair came the same day.
While Schulze will remain as a director for one more year, it's clearly a new era for the 50-billion-a-year electronics giant. The man who came to symbolize the energy and success of Best Buy will soon have no role within his company, beyond the symbolic title, "Founder and Chairman Emeritus."
That didn't seem to trouble Wall Street on Monday. After news of Schulze's stepping down became public, Best Buy shares rose 1.5 percent. Partly, that's because investors faulted Best Buy's
leadership for being too tied to big-box stores, and too slow to adapt to challenges that threaten its future.
"We believe today's announcement that the chairman will relinquish control of the company he founded marks a major positive move for this retailer," Credit Suisse analyst Gary Balter wrote in a research note. He added that henceforth, the board "will now have more autonomy."
Still, Schulze's career displays a long history of adaption, from the first Sound of Music store that he and
a partner opened in St. Paul at the corner of Hamline and St. Clair.
Sound of Music later grew into a small chain of high-end stereo shops, then was remade again when a 1981 tornado devasted its Roseville location -- prompting Schulze to hold a hugely successful "Tornado Sale," revealing a new path, as a high-volume, no-frills electronics warehouse.
Best Buy would successfully surf the waves of change that followed: the dawn of the VCR, the rise of compact discs, the home-computer revolution, the heyday of big-box retailing, the arrival of the Internet, the cellphone boom, the digital TV transition.
Schulze was Best Buy's CEO for 35 years, one of only three in its history. "I never imagined the company would grow this large," he said as he stepped down from that job in 2002. "It has been a series of steps, most accomplished with risk."
Best Buy made Schulze a very wealthy man. Even now, he remains the company's largest stockholder, controlling 20 percent of its shares. Forbes in March estimated his net worth at 2 billion, ranking him among Minnesota's wealthiest residents.
In recent years, Schulze has distributed big chunks of that wealth. Although he never attended college, Schulze donated 50 million to the University of St. Thomas, which now has a Schulze Hall in downtown Minneapolis.
When the building opened in 2005, Schulze invited his friend and fellow billionaire Bill Gates to talk to the students.
Schulze or his foundation also gave 40 million to the University of Minnesota for diabetes research, 49 million to the Mayo Clinic for cancer research, and 7.5 million for housing for cancer patients.
Cancer and diabetes research has been a special focus for Schulze. In 2001, Schulze's first wife, Sandra, died of cancer.
At Best Buy's corporate headquarters in Richfield, the complex's large cafeteria is named "Sandy's Place," in her honor.
Tom Webb can be reached at 651-228-5428. Follow him at twitter.com/TomWebbMN
___ (c)2012 the Pioneer Press (St. Paul, Minn.) Visit the Pioneer Press (St.
Paul, Minn.) at www.twincities.com Distributed by MCT Information Services
Copyright (C) 2012, Pioneer Press, St. Paul, Minn.
