Walter Isaacson, the biographer of Steve Jobs, told me in an email that Hubert Joly — the retail industry insider who this week took the top job at activist investor Carl Icahn’s struggling electronics retailer, Best Buy — is “second to none” in his field.
Hmmm. What is it about Joly that made a former investment banker and his partner, Jean-Charles Massoum, willing to pay more than a billion dollars for one of the most publicly troubled companies in recent memory?
Well, Isaacson says, Joly had worked at Lucent, BT Group and Best Buy, and he’d cut deals. Isaacson called his success as “a maven for transactional sales — in effect, brokering deals — that often allowed telecom companies and retailers to strike hard bargain. “
In the 1990s, for example, Hewlett-Packard was struggling to defend its market share in the nascent computer market, and it had made substantial investments in its Compaq brand, which had failed to keep pace with IBM’s delectable brand. So Hubert would invite Compaq execs and HP executives into a smoke-filled room, and would then walk them back to their cars, stick an “X” on their car and instruct them to turn to the X and turn to the right.
Eventually, Isaacson says, Joly managed to persuade HP to sell itself to Compaq.
That’s pure business. From there, Hubert sold a joint venture of his to IBM, a business which would be ultimately lose-making.
It’s easy to imagine the combustible set of circumstances which changed the course of the industry.
But the lack of focus, and willingness to cut corners, Isaacson says, is something that Isaacson admires. “He knows every corner of the brick-and-mortar retail space.”
And the buyers couldn’t be happier.
Here’s the email he sent me:
I’m thrilled to have many of my great sources reach out to me after the news about Hubert Joly and Best Buy. Here are a few:
Walter Isaacson: “We have been colleagues for many years. Hubert Joly is second to none. “He knows every corner of the brick-and-mortar retail space. Years ago, HP as an investor, was extremely fortunate to be the partner of Hubert and Jean-Charles Massoum, who had been colleagues of mine for many years in the telecom industry. What looked like a lemon at the time was a well crafted deal, when HP sold on the value of the Compaq brand. I have always admired Hubert’s operations, the ability to see around corners and to have an understanding that not everyone thinks the same. He is a maven for transactional sales – in effect, brokering deals – that often allowed telecom companies and retailers to strike hard bargain. I’m delighted that they bought his company.”
Marc Dreier: “I always considered best Buy its worst stock. Though loaded with a tired portfolio, service and pricing could also exist. But, it was a mismatch of management that couldn’t strike a balance. Which is now changing.”
Sources: Isaacson, “The Amazing Transformation of Best Buy,” Boston Globe, Aug. 17, 2012; Wall Street Journal, “Best Buy Not Badly Damaged, Not Hurt at All by Hubert Joly,” May 27, 2013; The Wall Street Journal, “Hubert Joly Taps Company Veteran as Best Buy CEO,” June 2, 2013; Washington Post, “Hubert Joly Chops Best Buy’s Dream Team,” Feb. 18, 2013