Electronics giant Best Buy said today it will close 50 of its big box electronics retail stores and shift to a business model emphasizing smaller stores selling cell phones, tablets and e-readers. The company didn’t issue a list of stores intended for closure.
Electronics giant Best Buy said Thursday it will close 50 of its big box electronics retail stores and shift to a business model emphasizing smaller stores selling cellphones, tablets and e-readers.
The company didn’t issue a list of stores intended for closure. Those closures are scheduled to happen before the end of the year. Best Buy will also trim its corporate staff by 400 positions. In the South Sound, Best Buy has big-box stores in Tacoma, Federal Way, Puyallup, Tukwila, Lacey and Olympia.
Those moves and others are designed to save the company $800 million. That new strategy was announced as the company said it lost $1.7 billion in its fiscal fourth quarter ending on March 3.
In recent years, computer and electronics big-box chains have closed as shoppers move online to Amazon.com, eBay and other Internet retailers. Best Buy has found itself as unwitting display rooms for online retailers. Shoppers come to Best Buy to check out the look and feel of the electronics they want to buy and then enter orders for cheaper online merchandise, sometimes in the big-box store through their cellphones.
The company is rolling out smaller versions of its large stores in San Antonio and St. Paul. Those stores will have 20 percent less floor space than the traditional format. The company will also open 100 small stores emphasizing smaller devices such as cell phones and tablets, not appliances, TVs and computers.
“In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance,” said Chief Executive Brian J. Dunn in a statement.
In the quarter that ended March 3, Best Buy suffered a $1.7 billion loss, or $4.89 per share, compared to a $651 million profit, or $1.62 per share gain, over the same period a year ago. But without the company’s $2.6 billion in one-time charges, adjusted earnings were $2.47 a share.
Revenue was up 3 percent to $16.08 billion, but analysts had expected more than $1 billion on top of that. Same-store sales at locations open more than a year tumbled 2.4 percent.
Over the full fiscal year, Best Buy lost $1.23 billion, or $3.36 per share after making a $1.28 billion profit, or $3.08 per share gain, the year before. Revenue increased 2 percent to $50.7 billion, though same-store sales were down more than 1 percent.Read more here: http://www.thenewstribune.com/2012/03/29/2087118/best-buy-closing-50-big-box-stores.html?storylink=rss#storylink=cpy