Would Richard Schulze's New Strategy Make Best Buy More Like Apple?

According to the

, part of Best Buy

founder Richard Shulze's turnaround plan is to compete with Apple

on customer service. Shulze has offered to take the struggling retailer private at between $24 and $26 per share. Currently, BBY is trading at just under $20. The proposal is informal, and many on Wall Street are skeptical that he could obtain the necessary financing to buy the company. If Schulze is successful in his bid, it would be the largest go-private deal since the financial crisis. The Journal is reporting that potential partners in the deal could include private equity firms Apollo Global Management, KKR & Co., Leonard Green & Partners and TPG Capital, among others. Mr. Schulze indicated as much when he said that he has had discussions with "leading private-equity firms," about the potential transaction, but he did not mention any specific names. Currently, the Best Buy founder owns one fifth of the company, but he no longer has an official role with the company after relinquishing his chairmanship in June. What is interesting about Mr. Schulze's plans for the company is that they are in direct opposition to those of the current management team. Best Buy has been struggling with very weak top-line growth in recent years, and the this has taken a toll on the share price. The stock has lost more than 54 percent of its value over the last five years as the company's business model has come under scrutiny from investors. Rather than supporting Best Buy's current strategy of cutting costs and downsizing the business, Schulze's plan calls for the company to cut prices while avoiding major cost-cutting. According to the Journal's report, Schulze believes that the current downsizing plans could put the company out of business. He thinks that in order to compete with the likes of Amazon

and Apple

, Best Buy will have to improve its value proposition in the eyes of consumers, and that means lower prices and premium service. Of course, this strategy could be costly in the near-term, and may never work out. What seems certain is that Schulze's ideas for the company would be nearly impossible to implement if Best Buy stays a public company. Not only does management appear to disagree with the founder, but it is unlikely shareholders would tolerate such a risky plan that would surely be unprofitable in the near-term. It seems as if Best Buy will continue to aggressively cut costs as the battle for the company plays out. According to a Wall Street Journal source, the company will announce in the coming weeks that it plans to cut costs even more by selling space in excess of 1 million square feet and closing more stores than the 50 it has already announced. The company's board of directors has told Mr. Schulze that it wants to wait until after its earnings announcement on August 21 to revisit the proposal. Meanwhile, the details of a potential deal such as partners nad financing will have to be ironed out before the market actually takes the offer seriously. While Mr Schulze's bankers at Credit Suisse

said that they are "highly confident" that they can secure $7 billion in funding for the transaction through debt, Schulze and his potential partners would still have to come up with around $3 billion in cash.