(Reuters) - Best Buy Co Inc Chief Executive Brian Dunn has resigned after 28 years with the world's largest consumer electronics retail chain, which said it has formed a search committee to look for a new CEO.
Shares of Best Buy, which has reported disappointing sales amid competition from online retailers like Amazon.com Inc and discount retailers like Wal-Mart Stores Inc, initally rose as much as 5 percent on the news, before erasing gains to trade down more than 3 percent. The S&P retail index was down 0.8 percent.
Best Buy said it had no disagreements with Dunn on operations, but "there was mutual agreement that it was time for new leadership to address the challenges that face the company.
MICHAEL PACHTER, ANALYST AT WEDBUSH SECURITIES
"I hate to be rude, but I think he was doing a terrible job. This is a company that had a sales guy in charge, and I just don't think they are well positioned to deal with the onslaught from the Internet."
"They have a big disadvantage to the Internet retailers because they have a big cost structure. So they need a guy who can fix that rather than trying to sell more stuff."
BRIAN SOZZI, CHIEF EQUITIES ANALYST AT NBG PRODUCTIONS
"It's been on his watch that the company has been late to address all industry upheavals, it's been late in closing stores, and most importantly I think they've tossed money down the drain repurchasing shares under his watch too, cash that could have been stored on the balance sheet to address the future of increased online consumption of electronics."
On the next CEO: "I sure hope it's someone with a strong online presence or a strong presence of mind that you need to conserve cash and you need to bolster the website presence."
SCOTT TILGHMAN, ANALYST AT CARIS & CO
"Ultimately, Brian served the company well given his history but at the same time, the retail landscape is changing rapidly. One of the challenges for the company has been moving as quickly as they should in addressing those changes."
On the next CEO: "One of the key components is going to be cost rationalization - more importantly, the company needs to take a step back and figure out how they are going to differentiate themselves."
"The speed of transition has been their biggest challenge. There have been some difficulties managing investor expectations."
SHAWN GAULT, PORTFOLIO MANAGER AT KEMPNER CAPITAL MANAGEMENT INC, WHICH OWS BEST BUY SHARES
"The market will perceive it as a good move. He did not fully embrace the changing retail distribution channel. They need to do something and change their strategy. Internet retailers like Amazon are eating their lunch, so to speak. The move doesn't surprise me."
(Reporting by Mihir Dalal, Jessica Wohl and Phil Wahba; Compiled by Tiffany Wu)