Best Buy will close 50 stores and cut about 400 corporate and support jobs, the company announced in late March along with a fourth-quarter loss, partly due to restructuring costs.
Among these cost-reducing measures, hopefully saving them $800 million by 2015, are plans to open 100 of the smaller Best Buy Mobile stores by the next fiscal year.
“I think it’s a necessary step for Best Buy,” said Chris Campbell, a senior fire protection engineering major. “I think they’re losing a lot of their market share to other retailers like Amazon [that] sells a lot of electronics now.”
Although Campbell makes small purchases like music and video game equipment at BestBuy, he buys bigger items elsewhere, like a big-screen TV at Costco. Campbell’s shopping habits substantiate many analysts’ opinions that online retailers have made a dent on physical “brick-and-mortar” stores. The Wall Street Journal also identified a phenomenon they call “showrooming,” where people window-shop for big-ticket items at stores like Best Buy, only to buy it online or at other retailers for cheaper.
“I can understand why they’re doing it,” said Eric Harvey, a senior government and politics major. “I just hope none of the ones that are near where I am are closing.”
Harvey said he shops at Best Buy a lot, and the last thing that he bought from Best Buy was a pair of headphones. He bought his laptop directly from the Apple store and usually buys other big items online.
Best Buy CEO Brian Dunn said in the press release that the company, which currently employs 180,000 people, is also tweaking big box store format, converting some into “Connected Stores.” Two locations in the U.S. will test-drive the reduced square footage and increased “points of presence.”
Right now, there are 305 Best Buy Mobile stores open in the U.S., and the company’s goal is to have a total of 600 to 800 stores by 2016.
A Best Buy spokesperson told MSNBC that the company has not yet decided which big box stores to shutter.