Best Buy Co. (BBY) (BBY) said Chief Executive Officer Brian Dunn resigned and board member G. Mike Mikan is taking the position on an interim basis as the company focuses on smaller stores and Internet sales.

The change was a “mutual agreement” that new leadership was needed, the Richfield, Minnesota-based company said today in a statement. A committee of directors has been created to search for a new CEO, the company said.

Best Buy, the world’s largest electronics retailer, has been cutting jobs and shifting to smaller store formats amid competition from Internet retailers such as Amazon.com Inc. (AMZN) (AMZN) Dunn, who started with Best Buy in 1985 as a VCR salesman, said in an interview last month that he believed he was the “right person” to lead the company through the transition.

“Best Buy needs to bring in a CEO who embraces change to do battle with the likes of Amazon,” Brian Sozzi, an independent analyst in New York, said today by telephone. He rates the shares sell. “The world of consumer electronics retailing five years out is online, online, online.”

Best Buy fell 4.1 percent to $21.72 at 10:21 a.m. in New York. The shares (BBY) tumbled 31 percent from June 23, 2009, the day before Dunn took over as CEO, through yesterday.

Annual Loss
Best Buy last month posted a $1.23 billion net loss (BBY) for its fiscal 2012, its first annual loss in more than two decades, as sales rose less than 1 percent. The company said it would close 50 U.S. big-box stores this year and expand its smaller Best Buy Mobile stores to as many as 800 outlets by its fiscal 2016, from 305 now.

“I believe I absolutely am the right person to lead the company forward,” Dunn, 52, said in a telephone interview after the announcement. “I’m really not spending a lot of time looking in my rearview mirror. I believe wholeheartedly in what we are doing.”

Mikan, who has been on Best Buy’s board since April 2008, previously served as chief financial officer of UnitedHealth Group Inc. (UNH) (UNH) and CEO of Optum, a UnitedHealth affiliate in health- care services.

The plot continues to thicken in the story surrounding this week's sudden departure of Best Buy CEO Brian "I Like My Burgers Well" Dunn. As some had suspected when he stepped down on Tuesday under the cloud of a "personal conduct" probe, new reports claim that the 28-year Best Buy vet was being investigated for possibly misusing company assets while involved in a relationship with a female employee of the electronics retail chain.

The Minneapolis Star-Tribune was the first to report that 51-year-old Dunn, who stepped into the CEO role nearly three years ago, had "acted inappropriately" with a 29-year-old employee who was identified by the Wall Street Journal as a working in the leadership training institute at Best Buy HQ.

The Star-Tribune gave Best Buy the opportunity to deny its source's claims, but a spokesman for the retailer only said, "the investigation is ongoing. We have no additional comment at this time."

The Wall Street Journal attempted to speak to the woman, saying that her Facebook page still listed her as a Best Buy staffer. When they were unsuccessful, the paper says it did find someone close to her that said the situation was "something small that people blew out of proportion."

Even so, Dunn's quickie exit is reminiscent of the 2010 departure of HP CEO Mark Hurd, who is alleged to have used company funds in an attempt to woo a former reality show star that he had hired to host events for company executives.