Best Buy will go public with results of ‘inappropriate relationship’ investigation

Few things fire a news cycle like the words, “inappropriate relationship.” Never mind EBITDA; now we’re talking something everyone thinks they understand. The Strib’s Thomas Lee is leading the pack on the latest about ex-Best Buy CEO Brian Dunn. This morning Lee wrote, “Best Buy’s board of directors is investigating allegations that former CEO Brian Dunn, who abruptly resigned Tuesday, used company resources to carry out an inappropriate relationship with a female employee, the Star Tribune has learned. Asked multiple times to respond to the allegations regarding Dunn, Best Buy representatives declined to comment. Asked directly Wednesday whether the company wanted to challenge the Star Tribune’s reporting, the company declined. ‘As we have said, the investigation is ongoing. We have no additional comment at this time,’ said Greg Hitt of Public Strategies Inc., who is acting as a spokesman for Best Buy. According to a source close to Best Buy, the company is investigating multiple complaints that Dunn behaved inappropriately with a female subordinate.”

By early afternoon Lee was saying, “Best Buy Co. said Thursday that it will make public the findings of an investigation into former CEO Brian Dunn’s personal conduct and promised to ‘take appropriate action.’ Officials say they expect to release the report in a matter of weeks.”

From Lee the story jumps to places like Bloomberg, who appear to have their own glasses against the wall on this one. Carol Hymowitz and Chris Burritt write, “Best Buy Co.’s board investigation of former Chief Executive Officer Brian Dunn’s personal conduct centers on an inappropriate relationship with a female employee, according to a person familiar with the matter. People close to Best Buy were concerned that Dunn’s behavior was threatening the company, said the person, who asked not to be named because the matter is private. The Star Tribune in Minneapolis reported on the nature of the investigation earlier, citing a person familiar with the situation. … The investigation is continuing and Best Buy has no additional comment, Ron Hutcheson, a Best Buy spokesman who works for Hill + Knowlton Strategies in Washington, said today in an e-mailed statement. ‘The board’s findings will be made public and appropriate action will be taken if warranted,’ Hutcheson said. … [Former CEO Brad] Anderson said he groomed Dunn to succeed him when he retired in 2009, making his departure a ‘sad story.’ ‘It’s incredibly painful thing for Brian and his family,’ Anderson said. ‘This is not to diminish Brian’s ownership or the consequence or the other consequences to people in the organization, but just on a personal level this is really hard to see.’ “

At TIME, Sam Gustin adds, “Dunn, a prolific Twitter user, has transferred his account from @bbyceo to @briandunn, where his bio reads, in part, ‘Father of 3 and Husband.’ He has not responded to requests for comment.”

Also, don’t miss David Brauer’s report, here at MinnPost on Stribber Lee’s sideshow Twitter drama.

The Glean

On a straight business front, Amanda Alix at The Motley Fool takes another swing at why Best Buy is perilously close to “junk.” “As the retailer suffers a downgrade from Standard & Poor’s placing it perilously close to junk status, and as it also firms up plans to lay off hundreds more employees and revamp their retail store model, the question persists: What went wrong? … A recent article from Reuters opines that Best Buy and fellow sad sack Radio Shack are made to suffer by hosting Apple’s products within their stores. Margins for Apple devices are tighter than for other brands, of course, but those items bring in foot traffic that might not have entered the store under other circumstances — hence, the reason to carry Apple products in the first place. It’s a low margin Catch-22 that hurts these retailers. However, the stores do make more profit on Macs than on PCs and almost always sell an accessory or two with that iPad or iPhone. Is Best Buy really being bullied by the big boys? Certainly, the competitive threats are real, but to lay all of the company’s problems at that doorstep seems overdone to me. After all, competition is the name of the game, and other retailers going up against Amazon are not suffering the same fate as Best Buy. As it turns out, the real problem is how Best Buy treats its customers.”

Native American claims against the federal government, some dating back 100 years, have been settled. The Duluth News Tribune story says, “The U.S. government has reached a $1 billion settlement with 41 Indian tribes across the nation, including several in northern Minnesota, over longstanding land and trust claims. U.S. Interior Secretary Ken Salazar and Attorney General Eric Holder announced the settlement Wednesday afternoon, April 11, following 22 months of negotiations. These settlements resolve claims dating back more than 100 years and will ‘bring to an end protracted litigation that has burdened both the plaintiffs and the United States,’ federal officials said in a statement. The Minnesota Chippewa Tribe and Leech Lake, Boise Forte, Bad River and Lac Du Flambeau bands will share in the money, although it wasn’t clear how much each band would receive.” But just about any percentage of a billion bucks is pretty good jing.

She’s right … I haven’t heard of any of these. Kathie Jenkins at the PiPress covers “Nine Twin Cities Restaurants You Probably Haven’t Heard Of.” Among them:

1. AIDA
2208 W. 66th St., Richfield; 612-866-5061; aidamn.com
A former Taco Bell at Penn Avenue and 66th Street in Richfield is now a Mediterranean restaurant with an Egyptian accent. The food – kebabs, shawarma, gyros, falafel – is very good. If you like lamb, you won’t want to miss the kofta kebab, perfectly seasoned ground lamb cooked on a flaming grill. There is also an awesome selection of toppings and sauces – and pink basmati rice that’s almost too pretty to eat.
4. LULU’S
1626 Selby Ave., St. Paul; 651-645-2160; mylulus.com
What happens when a young entrepreneur takes over a dilapidated convenience store? A miracle! Rouzbeh Toliati spent a year giving the former neighborhood spot a facelift and installing a fast-casual deli. The menu is a mix of Middle Eastern, Mediterranean and American, which means saffron fries, Greek salad and tabbouleh sharing the bill with juicy Lucys. If the fish tacos are offered as a special, you should get them.
6. SOSA
3909 Minnehaha Ave., Minneapolis; 612-728-9662; sosafoods.comcastbiz.net
At this Puerto Rican deli in a divey convenience store, you pay for your food in one place and soft drinks in another. You probably will have to wait for a table – and then share it. But none of this will matter after one bite of the shrimp mofongo, a fragrant soupy bowl of garlic mashed plantains. The chicken wings are also fantastic, and so are the potato-crusted pork chops and beans and yellow rice.”

I’m not sure you can say “shrimp mofongo” in a family paper?

The eight year-old boy struggling to recover from hypothermia as a result of that terrible sailboating accident is showing signs of improvement. Steve Wagner’s story, for the Bemidji Pioneer” says, “Isaiah Risland coughed and tried sitting up from his bed Wednesday at Children’s Hospital in Minneapolis, providing more positive signs the 8-year-old is recovering from hypothermia. The boy, who spent about an hour Friday in 40-degree water until first responders could get to him, also could undergo important brain tests by the weekend. ‘He is now sedated again to keep him comfortable and safe, but now we know what he can do,’ Sara Staley, an aunt, wrote in an online journal. Clearwater County Sheriff Mike Erickson said he met Wednesday with County Attorney Richard Mollin about the investigation and doesn’t expect criminal charges against Dan Risland, the boy’s father. ‘Putting him in jail or making him a criminal isn’t going to solve anything,’ Erickson said. ‘He lost two sons.’ ”

It’s tough, being “asked to resign.” But getting $41.85 an hour to “consult” on your old job helps a bit. Madeleine Baran of MPR writes, “David Proffitt, the embattled former administrator of Minnesota’s largest facility for those deemed mentally ill and dangerous, remains on the state payroll, the Department of Human Services confirmed Wednesday. Proffitt held the top job at the Minnesota Security Hospital for less than seven months when DHS Deputy Commissioner Anne Barry ordered him to either resign or be fired in late March.

Although DHS has hired a new administrator to run the St. Peter facility, the agency is paying Proffitt $41.85 an hour to serve as a temporary consultant during the transition period. The wage is about ten dollars an hour less than what Proffitt earned when he ran the facility. The temporary position will end June 26, the agency said. By that time, according to DHS figures, Proffitt will have earned at least $20,000 as a consultant.” Someone should find out if he knows anything about selling electronics online.

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Comments (3)

  1. Submitted by Fluffy Rabinowitz on 04/12/2012 - 04:31 pm.

    Sloppy Journalism

    Thomas Lee’s s victory laps around the news room and high-fives are being replaced with some serious meetings. ‘Strib management should perform a thorough of the competency of Todd Stone, Business Editor and Mr. Lee.

  2. Submitted by Rachel Kahler on 04/12/2012 - 05:28 pm.

    Geez

    Who do you suppose Dunn ticked off so badly with his “inappropriate behavior” that he’s going to be publicly exposed? Was this female subordinate someone important’s wife or daughter? Someone that someone important wanted for him/herself? It seems pretty unusual to make a public deal out of a grabby-handed CEO. Perhaps this is a smoke screen for the actual business failure? Or maybe it’s an attempt to get out of a gigantoid lawsuit? Or is it simply personal, as I’ve already suggested?

    In any case, it’s the corporate equivalent of gossip. Why, again, is this 1/3 to 1/2 of the entire news day?

  3. Submitted by Mark Gisleson on 04/13/2012 - 09:40 am.

    How Best Buy treats their customers

    Hardly a horror story, but I needed to quickly buy a cheap digital camera the other day. There were five sales people covering that section of the store, and only three of us customers. Buying the cheapest camera on display took forty minutes!

    The hardest part was getting the attention of a sales person with a key. Both of them were busy closing the other two customers. I finally grabbed a sales guy from another area who yelled at a closer who then tossed him the keys. I got the box and ran up to the cash registers. The sale was for $40 more than the display price so I took the camera back and waited for a closer to be available.

    Once I had a camera sales person’s attention, he quickly told me that the display camera was a 2011 Samsung but all they had in stock were the more expensive 2012 models. But he then showed me a much cheaper Olympus that I had passed up because it was too cheap (he explained I’d have to buy a memory card to go with it and that it was actually a very good camera and so far it’s proven to be just that).

    Best Buy has sales people who know what they’re doing, operating in a climate of forced inefficiency. Like many failing American businesses, they’re crippled by a senior management team that somewhere along the way forgot that the customers are the boss. Forty minutes to buy a cheap camera? That’s letting a spreadsheet be in charge.

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