TPG Capital and Leonard Green & Partners LP also are working with Best Buy’s former chairman on arranging financing, they said. The three private-equity firms are working separately for now, said one of these people, though they could work together eventually on a final bid.
Schulze and his allies pressed for the 30-day extension, which would take them into late December, so they could see how Best Buy performs during the holidays before they agreed to fund what would be one of the largest buyouts in years, said one of these people. The retailer lost $1.23 billion in its most recent fiscal year.
In the third quarter, lower U.S. comparable-store sales of televisions, notebook computers, gaming and digital-imaging devices muted gains by mobile phones, appliances and tablets in stores open at least 14 months. Total comparable-store sales have now declined in nine of the past 10 quarters.
Higher spending on training and compensation for sales employees and transition costs for executives boosted U.S. selling, general and administrative expenses. Total selling, general and administrative expenses rose 2.7 percent to $2.53 billion. Gross profit narrowed to 24 percent of sales from 25.6 percent.
“Joly can’t control whether people are going to buy big flat-panel TVs, but getting control of expenses is something a CEO should be able to do,” Gordon said.