Electronics big box retailer Best Buy announced this week that it will close 50 of its roughly 1,450 stores across the country and lay off 400 workers in an effort to cut $800 million from its budget. The announcement follows a $1.7 billion loss in profit the company reported in its most recent quarterly earnings reports.
According to a report from NPR, Best Buy’s big-chain model and expansive show rooms have been unable to keep up with the decrease in demand for expensive electronics. Coupled with competition from Amazon and other online retailers, Best Buy is now having to rethink its business model:
[CEO Brian Dunn] said Best Buy is also going to pilot another store model similar to the big box — but on a diet. It’s being tested in two markets — San Antonio, Texas, and Minnesota’s Twin Cities.
Best Buy is calling these trimmed-down big boxes “connected” stores. They’ll focus more on portable electronics, like e-readers and tablets. And they’ll feature a “central knowledge desk” where customers can get stuff like wireless plans for mobile phones. Those kinds of services, along with warranties, are big moneymakers for the retailer.
The Daily Advertiser’s Amanda McElfresh reports in a Thursday blog
that the future of Lafayette’s Best Buy, located on Johnston Street near the Mall of Acadiana, is yet to be determined. According to the daily, it’s also unclear whether Lafayette will house one of the company’s new store models.
“We have not yet disclosed the 50 stores that will be closing to fuel the growth initiatives that we outlines in our news release this morning,” Best Buy spokeswoman Sue Busch Nehring tells The Advertiser. “We are quite deliberate and thoughtful when we make such decisions. We are working to ensure the impact to our employees will be as minimal as possible, while serving all customers in a convenient and satisfying way. We will announce details about specific store locations and timing for closings once they are finalized.”
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