Best Buy To Close 50 Stores, Revamp Strategy

Say it ain’t so big blue?  Best Buy, the nation’s largest consumer electronics chain reported on Thursday that they would be closing 50 stores, reducing their corporate workforce by 400 jobs and trimming $800 million in costs. They will, at the same time, open 100 new, smaller, and more profitable, Best Buy Mobile stores.

“How do we position the company so we’re where our customers need us to be?” Brian Dunn, Best Buy’s chief executive, asked on a conference call with analysts on Thursday. “We’re clearly going to have more doors and less square footage.”

More after the break

Best Buy posted a $1.7 billion dollar loss in the quarter ending March 3, 2012. A lot of this loss came from Best Buy’s buying out partner Carphone Warehouse’s interest in the Best Buy Mobile stores and stores within a store. Best Buy Mobile is now a fully owned subsidiary of Best Buy. This could be a signal that Best Buy is moving back to the position they had before in the mobile phone department and treat it as a department within the stores.

Prior to their joint venture with Car Phone Warehouse and the rollout of the small Best Buy Mobile stand-alone locations and the “store within a store” locations, Best Buy treated wireless as another store department. This purchase could also signal other products going into some of their mall locations.

The New York Times is reporting that Best Buy is trying to make sure they don’t suffer the same fate as Circuit City did when they had to liquidate in 2009 due to the changes in the consumer electronics landscape.

source: NYT