BestBuy has announced that it will close the 250 small mobile device stores in the US. UU Before May 31. Reportedly, the stores contributed just over 1 percent to the company's total revenues. The closures will not affect BestBuy's mobile stores in Canada, and the company will continue to sell mobile phones both online and in its "big box" stores.
BestBuy began opening dedicated mobile phone stores about ten years ago, before the first iPhone was launched. Mobile stores are small, averaging 1,400 square feet, compared to standard-sized stores, which average 40,000 square feet. BestBuy's mobile stores also compete with wireless service providers that have their own street stores, as well as with Apple and online retailers such as Amazon.
"The cost of operations in our independent mobile stores is higher than in our large box stores."
In an internal memo seen by Reuters, Chief Executive Hubert Joly told employees that margins in stores had been "compressed" and that "the cost of operations in our independent mobile stores is higher than in our large stores" . About 85 percent of BestBuy mobile stores are located less than three miles from major stores, the memo notes.
It is reported that BestBuy will help redeploy employees to other parts of the company during the next three months, but did not indicate how many would be affected. Those who leave after May 31 will receive compensation packages, and BestBuy will help them with external job searches. This is not the first time that a change in the retail market has caused a change in BestBuy's strategy. Last month, the company announced that it would stop selling CDs in stores as digital music revenues continue to grow.