A once-dominant company, brought to its knees by competition from Apple and Amazon, is faced with dropping sales, a sinking share price, and angry shareholders. In walks the silver-haired founder of the company, who volunteers part of his reduced, if still substantial fortune, in order to buy the company and save the brand.
If you said Richard Schulz and Best Buy, you’d be right. And if you said Michael Dell and Dell, you’d also be right. And, as of this morning, if you said Leonard Riggio and Barnes & Noble, you’d again be right.
The last few months have seen the harsh results of Amazon’s retail ubiquity and Apple’s mobile dominance. Dell has been felled by a stagnant product lineup and dwindling consumer demand. Best Buy and Barnes & Noble – saddled with expensive real estate and plagued by “showrooming,” where customers go to stores, look at an item, and then buy it online – cannot match Amazon’s low prices. In each case, the founder of the company has stepped in with an offer to buy the company, though with slightly different results. Best Buy has not yet accepted Schulze’s offer to take a larger stake in the company. Dell’s offer to take his namesake company private remains in limbo. And Riggio’s plan to purchase B & N’s retail assets is yet to be finalized.
But more fundamental questions remain. Are the founders of these companies, none of which are really on the bleeding edge, capable enough to go head-to-head with Jeff Bezos or Tim Cook? Can they reverse the companies’ slow decline? One might take heart from Gregg Steinhaffel, CEO of Target, who has successfully steered the bullseye brand against the assault from Amazon. Steinhaffel’s success lies in producing savvy marketing, cheap-chic clothing, and limited-run collaborations with designers – all of which draw people into stores. Zac Posen Nook cover, anyone?