Best Buy closing 50 big box stores, adding 100 Best Buy Mobile locations

Best Buy closing 50 big box stores, adding 100 Best Buy Mobile locations
Best Buy is making some changes according to the Wall Street Journal. The big box retailer plans on closing 50 stores out of the 1,100 it currently runs. It will also test a new format in San Antonio and Minneapolis and lay off 400 employees. The whole package will cut $800 million in costs. Earlier reports said that the popularity of the new Apple iPad had contributed to the problem because of its low margins.

Additionally, Best Buy is losing business to those who come into its stores to browse for merchandise, but then make the actual purchase through an online retailer like Amazon. These online stores do not have to collect sales tax or carry inventory at a number of retail locations like Best Buy does. And many popular Apple products can be purchased at the manufacturer's own stores.

Best Buy is running tests for what it calls "connected stores" in San Antonio and Minneapolis. These stores will concentrate on tech support and wireless connections, offer large new hubs for shoppers, redesigned checkout lanes, and a quicker way to pick up products purchased earlier. The retailer will boost spending on employee training by 40% and offer incentive for salespeople on the floor. When the latter was tried in the mobile phones department, sales took off. Best Buy wants to reduce its footprint by 10% in the coming years and bolster its online offering. On the other hand, with smartphones remaining a hot growth industry, the company will add 100 new Best Buy Mobile stores. These stores concentrate on mobile phones and tablets.

Best Buy will add 100 new Best Buy Mobile locations

Best Buy will add 100 new Best Buy Mobile locations

For the latest quarter, Best Buy lost $1.7 billion after a $2.6 billion restructuring charge, compared with the previous year's profit of $651 million. Revenue rose 3.4% to $16.63 although sales from all stores, call-centers and web-sites open more than 14 months was down 2.4% year-over-year. Best Buy said that it believes it gained market share during this three month period. For the entire year, Best Buy's revenue rose 2% to $50.7 million. Mobile device sales in the U.S. added 3.4% to $16.63 billion. For the current year, Best Buy expects revenue to be flat.

source: WallStreetJournal

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38 Comments

1. nnaatthhaannx2

Posts: 820; Member since: Oct 19, 2011

BestBuy is overpiced anyways. No one is going to buy a phone from BestBuy, they are not even discounted that much.

5. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Overpriced compared to Amazon, maybe. And Amazon doesn't have our expenses. Compared to the carrier stores? We're often the same price or cheaper, sometimes by fifty or a hundred dollars. And we don't f**k around with mail in rebates. So how about you not make ignorant statements?

28. agentoj

Posts: 105; Member since: Oct 29, 2009

Best Buy does have pretty good prices on phones. Also, their return policy is great. The only thing I hate is getting an incompetent person who does not know how to change the contract date after you have returned a phone (yeah that happened). Moreover, Amazon's incredible pricing is usually only for completely new customers.

33. oddmanout

Posts: 443; Member since: May 22, 2009

agentoj - This is happening to me NOW! I returned a galaxy note at bestbuy on the 14th in hopes to reserve my upgrade for the upcoming HTC One X. 2 days after returning it I heard about a delay regarding the processing chips for the one x so I just said screw the One X and tried to pick the Galaxy note up again. I couldn't get the phone and they told me my upgrade renewal wasn't fully processed and that it took 24-48 hours for it to finish. So 2 days later I go back trying to pick up the note and still can't upgrade. So now they tell me my wait is 2-3 buisness days. I've checked online to see if I'm eligible for an upgrade for weeks now and it still say I'm ineligible. Not only did they mess up my upgrade, they are leaving me in the dark with a bill I'm forced to pay for a phone line that isn't being used. Sweet right? I'm thinking about suing for a reimburstment of the cost it will take to either end the line (ETF) + the activation to add a new line or sue for the charges of the bill that I must pay for a line that can't have a phone! Either way, I shouldn't have to be put in this situation and is clearly Best Buy mobile department's fault. What do you suppose I do about it?

34. ibap

Posts: 865; Member since: Sep 09, 2009

Best Buy should absolutely make this right, but if you've followed anything in the cell world, you shouldn't bet on any release date or feature until the phone is actually available. I love the folks that drool for some new phone and then want to sue because something that was rumored for it isn't included at release. Call your carrier and complain to them too.

37. jump454

Posts: 5; Member since: Feb 20, 2012

how is it best buys fault? was there a problem with your note? no. did they botch the paperwork on your original purchase no. therefore it was your fault cause you brought a perfectly good working phone back because you wanted to wait for a phone that was later delayed? you kinda screwed yourself there bud. and just call up att and let them know whats going on. theyll straighten it up.

38. oddmanout

Posts: 443; Member since: May 22, 2009

You guys must have it misunderstood. Best buy has a 30 day exchange period and a 14 day cancellation period. I only returned the phone and kept my upgrade which is a simple and common task (they've done this several times in the past). I returned the note because I didn't want it. Not because it was defective. Also, how would the fault be mine? Because I made a return? lol Thats preposterous. Every customer is entitled to a return period. The transaction was absolutely possible as I and many others have done this before. The representative screwed it up and two other employees including the manager have both confirmed that he must have done something wrong because my upgrade still has not been pushed back to be available to me. It has nothing to do with me wanting to save my upgrade for another phone. If someone with an upgrade due came into the store to upgrade and decided they didn't like the phone, they are absolutely entitled to a refund/exchange period. Processing the return and reinstating the upgrade eligibility is the responsibility of whom ever accepted the return. Its not my fault he processed the return without pushing back the upgrade date.

10. bigdawg23

Posts: 467; Member since: May 25, 2011

Price isn't everything. If you get a device and need to return or exchange it is a pain in the rear with Amazon. I can walk in to Best Buy no questions asked.

20. nsxviper

Posts: 3; Member since: Mar 29, 2012

It's much easier to return or exchange product to Amazon compared to most online retailers. Amazon pays for the return cost of shipping. If you need to exchange a product, they will ship the replacement before you even send yours. People shop at online retailers because everyone knows how overpriced Best Buy is.

12. LandLockedPH

Posts: 15; Member since: Jul 01, 2011

Right, So Best Buy goes the way of Circuit City, Sound Advice, Ultimate Electronics, CompUSA, etc., etc., etc. and what does that leave you with? Nothing BUT Amazon and buy.com. Stupid comment nnaatthhaannx2 !

31. lsutigers

Posts: 832; Member since: Mar 08, 2009

This is the start of the decline of the next brick & mortar giant in consumer electronics. Circuit City tried to re-structure but failed, Best Buy in next. Times have changed, as the article suggests, customers are using Best Buy as a giant show room where they can browse for products, the buy online for less. With the boom of smartphones, consumers are more educated than ever, with the power of the internet in their hands, which allows them to instantly price check ANYTHING they see at say, Best Buy. Best Buy is the last of the big boys, unfortunately, HH Gregg completely misread the market and expanded at the worst time, when the economy was in decline, thinking they would capitalize from Circuit City's fall, they will be gone soon too. At least it looks like these companies have finally realized that the future lies in mobile products, such as iPads, tablets and smartphones etc...The only problem is, most of these products carry very low margins, with the exception of connected devices that carry a contract. Another obstacle is the cost of wireless data to consumers today. Sprint is the only carrier offering unlimited data which is where I think the future will lead. Unfortunately, those great LTE speeds from AT&T & Verizon wont mean much if they are expensive and are very limited. It will be difficult to convince consumers to adopt a connected mobile device with costly / low data caps. We shall see how this all shapes up, but, if I were a Best Buy investor, I would get rid of that stock ASAP. Let's hope they can adapt to the market as quickly as mobile companies like Apple are defining it.

13. imkyle

Posts: 1112; Member since: Nov 18, 2010

Best Buy has good prices and their selection is good. Some of the people working their need to be decked in the head.

14. shimmyx20

Posts: 280; Member since: Mar 03, 2009

Agree. Some of the employees that work there are either ignorant or under trained about the departments they work in. I have, however, gotten a few really friendly and knowledgable folks. Sucks for the people who will lose their jobs.

21. imkyle

Posts: 1112; Member since: Nov 18, 2010

I agree with you. Most of the people there are nice, but i know about 3 or 4 people who need to get beaten and be told "your not hot s**t."

25. N.Reynolds

Posts: 257; Member since: Feb 15, 2011

Best Buy price matches anything except for online only prices...

2. buggerrer

Posts: 306; Member since: Sep 21, 2011

Good Best Buy Sucks!

3. tidus28

Posts: 26; Member since: Feb 08, 2012

for the best deals on phones you have to go to target mobile

6. LoneShaolin

Posts: 307; Member since: Jan 14, 2012

Target Mobile employee are Radio Shack employees.

8. Sniggly

Posts: 7305; Member since: Dec 05, 2009

If they're anything like Walmart Mobile they're not really cheaper than Best Buy mobile and sometimes more expensive.

4. prometheus1983

Posts: 5; Member since: Mar 28, 2012

I always have like 50 people in blue shirts harassing me as soon as i walk in. they are very overstaffed. thats why they are losing money. its getting worse than gamestop.

7. Sniggly

Posts: 7305; Member since: Dec 05, 2009

Well, what do you prefer? Fifty people asking you if you need help or fifty people ignoring you? We're not psychic, it's not like we all know that you've just told one of us to leave you the he'll alone. Also, if by overstuffed you mean one or two people per department, yeah, I guess we are.

16. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

you are taking these comments against Best Buy a little too personal lol

22. NjFrazer

Posts: 1; Member since: Mar 23, 2012

Calm down there big guy. Taking it a little too personal are we?

29. CannedKarma

Posts: 19; Member since: Oct 22, 2011

Get out while you're enjoying your job. I left my job as the top mobile rep at my location last year and I'm running a Verizon store now. I'm getting paid far better to do it (earning commission on sales that you work your rear off for isn't an evil thing, contrary to what your current training would have you believe), and my customers are happy that they don't have to enter a human zoo to be taken care of. Use your experience to your advantage. Best Buy will continue to drain you dry and underpay you.

9. MobileCaseReview

Posts: 242; Member since: Feb 10, 2012

Not to surprised. Brick and mortar business have been on the decline since the rise of the e-commerce industry. Case in point - Circuit City for those of you who remember here in the US.

15. -box-

Posts: 3991; Member since: Jan 04, 2012

Though Circuit City (in name at least) got purhcased by Systemax, TigerDirect's parent company, and, to my knowledge, still offers online shopping

35. MobileCaseReview

Posts: 242; Member since: Feb 10, 2012

Yes they transitioned strictly to online sales and distribution.

11. rallyguy

Posts: 620; Member since: Mar 13, 2012

I like Best Buy. The store is clean and bright. They have good prices on DVDs. The items I do buy from them are usually sale priced items since they tend to be a little high. But if something breaks and I need a replacement right away, I go to BB. I'm tired of going to other stores only to find out they don't have what I need. I'm willing to pay a little more for the convenience.

17. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

Fry's is better anyway, I predict Best Buy to be the next Circuit City

24. rallyguy

Posts: 620; Member since: Mar 13, 2012

Fry's is nice, but does not have the footprint BB does.

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