Despite reporting positive Q4 sales results (up 9%), Best Buy will shut down 250 of its small-format Mobile stores across the U.S. by May 31, 2018. The retailer said the stores only contributed to a little over 1% of overall revenue, with costs of operations that are higher compared to its big box stores.
"We began to open them more than a decade ago, before the iPhone was even launched,” explained Hubert Joly, Chairman and CEO for Best Buy in an internal letter. “Fast forward to 2018 and the mobile-phone business has matured, margins have compressed and the cost of operations in our Mobile stand-alone stores is higher than in our Big Box stores."
The stores, which are approximately 1,400 square feet in size, launched mainly within malls about a decade ago. And while small format stores are increasingly popular in retail today, the decision to close these locations comes at a time when consumers are directly shopping for mobile devices at wireless carriers’ standalone shops, Apple stores and even Amazon.
"We believe the best way to serve customers is to sell phones in channels where they have access to our whole range of connected devices,” said Joly.
- Best Buy Promotes New CEO and President
- Shopko Will Liquidate, Close All 360+ Stores After Failing To Find A Buyer
- Top Takeaways From Holiday Earnings: Store Closures Will Continue, Best Buy Comes Out A Winner
- JCPenney Will Continue Store Closures With 27 Locations In 2019
- HBC To Shutter Home Outfitters Chain, Up To 20 Saks OFF 5TH Stores