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Best Buy Commits to Green Building

BY CSA STAFF
HEADQUARTERS Minneapolis
REVENUE $35.9 billion (2006)
NUMBER OF STORES 1,200
AREAS OF OPERATION United States, Canada and China

Consumer-electronics giant Best Buy Co. is upping its commitment to the environment in a big way: Beginning in fiscal 2009 (which starts March 1, 2008), the retailer intends to build only LEED-certified stores in the United States. LEED (Leadership in Energy and Environmental Design) is the green rating system administered by the United States Green Building Council (USGBC). The chain also intends to register its corporate campus for LEED certification.

Best Buy’s decision to adhere to green-building standards chainwide was facilitated by its inclusion in a select group of other retailers—including Starbucks Corp., Tesco’s Fresh & Easy Neighborhood Market, Lowe’s Cos. and Target Corp.—that have been working with the USGBC since 2006 to test pilot a volume, or bulk, certification program. The program would provide a portfolio, or umbrella, solution to chain retailers by allowing them to have their prototype buildings LEED certified, as opposed to certifying individual locations. The USGBC would then test each certified store built under the prototype for quality control through random efficiency testing and unannounced visits.

Brenda Mathison heads up environmental affairs at Best Buy. She joined the chain in 2002. Under her direction, the company has won national recognition for its ambitious programs in the areas of waste minimization and consumer-electronics recycling. Chain Store Age executive editor Marianne Wilson talked with Mathison about her role at Best Buy and its environmental initiatives.

Chain Store Age: What are your responsibilities at Best Buy?

Mathison: Our Environmental Affairs team oversees the development and implementation of consistent, sustainable environmental programs for all of Best Buy, from the energy we use in our day-to-day operations, to the reuse and recycling programs for a multitude of materials.

We also bring together employees to collaborate on different initiatives, including green design for our facilities, and the products we sell, product packaging, and the transportation methods we use to deliver those products to our warehouses, stores and the homes of our customers.

CSA: What are some of the key programs initiated under your watch?

Mathison: In the beginning, we started with a myriad of projects which have quickly grown into the foundation of our environmental program. Our recycling programs, in particular, are notable. Best Buy recycles more consumer electronics than any other retailer, and also collects appliances for recycling when we deliver new products to customer homes. Last year we collected more than 31,000 tons of consumer electronics and appliances for reuse or recycling.

We were the first company to have a permanent kiosk in every Best Buy location for the collection and recycling of wireless products, compact disks, ink cartridges and rechargeable batteries. Our consumer-electronics recycling events were the first of their kind at a retail level, and in the past five years we have sponsored or hosted well over 100 events. Within our operations, we’ve recycled over 64,000 tons of cardboard and plastics. And our recent efforts with the USGBC on the LEED pilot for new retail sites have been a great opportunity for us.

CSA: Tell us a little bit about the new LEED program and how it would benefit retailers.

Mathison: The USGBC worked directly with us and other retailers to create a pilot that was feasible and manageable for us to adopt. Internally, we deliberately worked to include all departments that had a role in new store development to establish a prototype for our facilities.

We will effectively meet the LEED-certification criteria for all new stores in fiscal year 2009, regardless of square footage or geographic location of the store. Kimberly Hosken (director of special projects, USGBC) and Rick Fedrezzi (president, USGBC) demonstrated the USGBC’s commitment by working closely with us through the entire process to ensure the success of the pilot.

CSA: Some retailers build green but don’t seek LEED certification. Do you think there is an advantage to having a store LEED certified?

Mathison: By following the LEED-certification process, we were able to collaborate with the USGBC and other retailers to share ideas and best practices. The certification process provides a way to consistently measure our progress and success with an organization that has taken the lead in this space, and its programs are respected.

CSA: Has upper management been supportive of your efforts?

Mathison: It’s hard not to be supportive of environmental initiatives, but I feel fortunate to be with a company where taking care of the environment is part of our core values.

In a company this size, support comes in the form of resources, both money and people, and it comes from the employees who are willing to consider ways to improve the environmental impact of how we run our business. The fact that many of these programs not only conserve our natural resources and reduce our greenhouse-gas emissions, but also have a positive economic value, make them a win at every level of leadership.

CSA: Have you had any feedback from customers?

Mathison: We are just now beginning to take a more organized approach to determining if our customers value all of our environmental efforts.

Best Buy’s LEED prototype will feature a combination of green elements, including energy-efficient lighting (ceramic metal halide with dimmable lighting by zones, expected to reduce lighting costs by 20%), high-efficiency HVAC system, sustainable building materials, grey-water recycling and central energy-management system.

For certain, though, consumer support is evidenced by the success of our consumer-electronics recycling programs. Our customers have recycled over 45 tons of wireless devices, ink cartridges and rechargeable batteries through those in-store recycling kiosks.

We also see support coming from other organizations. For example, in 2006 we received the Environmental Initiative Award from the Minnesota Environmental Initiative.

CSA: What advice do you have for retailers looking to seek companywide buy-in of sustainability initiatives?

Mathison: Involve leaders at all levels in the company, and demonstrate the economic benefit—direct and indirect—as you present the business case.

CSA: What is motivating Best Buy to build green?

Mathison: As the leading consumer-electronics retailer, we have a responsibility to address what role we play and how we can better conserve, reduce, reuse and recycle in all aspects of our operations. Through our programs, we can address the concerns that our 140,000 employees, our customers and our stakeholders have about climate change and the environment.

CSA: What do you regard as your biggest accomplishment since joining Best Buy?

Mathison: It’s that we have truly established an environmental program that addresses all aspects of sustainability, and will have a lasting impact—long after I am gone—on our carbon footprint as well as the behaviors of our employees and customers.

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Winn-Dixie team honored for turnaround

BY CSA STAFF

JACKSONVILLE, Fla. The team that lead Winn-Dixie Stores’ successful turnaround initiative is being honored by the Turnaround Management Association for the best ‘Mega Company Turnaround’ for 2007. Comprised of financial experts from The Blackstone Group, Skadden, Arps, Slate, Meagher & Flom and Smith Hulsey & Busey, the team helped Winn-Dixie regain the market share and profits it started to lose in the mid 1990s and early 2000s to competitors Publix and Wal-Mart.

Winn-Dixie filed for Chapter 11 bankruptcy in early 2005 after reporting  year-to-date losses of $552.8 million or $3.93 per share of common stock and a decline of 4.9% in identical-store sales in its second fiscal quarter over the same period in 2004.

 

Despite the difficulty of achieving a succesful turnaround, Winn-Dixie began its reorganization effort, while still continuing to operate its core business and preserving jobs. According to the Turnaround Management Association, it created new common stock for five classes of unsecured creditors, with recoveries ranging from about 96% to 53%. The company emerged from bankruptcy on Nov. 21, 2006.

For its fiscal year ended June 27, Winn-Dixie reported adjusted EBITDA of  $85.9 million compared to a loss of $27.8 million last year and an identical-store sales increase of 1.6% 

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Sears ends deal with maternity retailer

BY CSA STAFF

PHILADELPHIA Sears and Mothers Work, the world’s leading maternity apparel retailer, will not be renewing their agreement, Mothers Work announced today. Under their current agreement, Mothers Works operates the maternity apparel department in 502 Sears stores through the sale of its Two Hearts Maternity branded merchandise.

Mothers Work said it expects its partnership with Sears to end on June 20, 2008, when it current deal with the company is expected to expire.

Rebecca Matthias, president and ceo of Mothers Work, noted, “While we are disappointed about the end of our relationship with Sears, we feel the decision not to proceed with a renewal is in the best interest of our stockholders since we were unable to reach terms on a renewal which would be favorable for Mothers Work and our stockholders. “

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