Losing hundreds of thousands of customers a year — and yet, Best Buy’s stock is worth $40 a share

Retail shopping in the United States has changed in the last decade. Now Americans have more options, and retailers have fewer ways to turn a profit.

But that has not deterred Best Buy Co. Inc. Its chief executive, Hubert Joly, has helped turn the electronics chain from a public loss-maker to a private profit-maker.

With its stock trading in the $40s, and its headquarters looking more like a private home, Best Buy could be a good first investment for venture capitalists to make their first name on Wall Street.

But Mr. Joly is working on a bigger picture. And there, he is questioning the very definition of capitalism.

“It’s not capitalism for people like me,” he said in an interview. “We need to look at these issues much more deeply and honestly than we do.”

Mr. Joly, a French-born, former McKinsey & Co. executive, was named Best Buy’s CEO last June. He says he has been working with investors from all over the world on his “sovereign authority” — a rare thing in corporate America.

For instance, hedge fund Lone Pine Capital, based in St. Louis, wanted Best Buy to become a commercial bank. Mr. Joly turned down the hedge fund’s offer.

He’s not going to make decisions about Best Buy’s strategy based on the whims of a single hedge fund, he said. “This is a critical decision for the future of Best Buy,” he said. “We have to do things for the right reasons, and not be just manipulating the market to please one hedge fund.”

Mr. Joly says he has no intention of firing Best Buy’s employees. Rather, he plans to leave the best of the company’s culture to come out the other side intact, while striving to create a more profitable company.

Best Buy has responded to the onslaught of online commerce by building a massive network of stores, each manned by hundreds of salespeople.

Recently, Best Buy has been investing in technology to help bring online shoppers back into its stores. Best Buy is trying a new website that will allow a shopper to take a picture of an item on his phone and order it — without leaving the store. The picture is sent to Best Buy, where the retailer orders the item for customers.

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