Best Buy To Cut Costs And Close Stores

By: KKTV/AP
By: KKTV/AP
Best Buy plans to close 50 stores in the 2013 fiscal year, and hopes to cut $800 million in costs over the next couple of years.

AP

The biggest U.S. specialty electronics retailer isn't immune to financial woes, announcing Thursday that it's closing 50 stores in the 2013 fiscal year.

Best Buy Co. says it lost money in its fiscal fourth quarter, but cites a restructuring charge as a big reason.

Best Buy, which has 1,450 locations nationwide and 2,900 globally, is focusing on closing some of its hulking stores to concentrate on smaller Best Buy Mobile outlets because of two emerging trends. Sales of TVs, digital cameras and videogame consoles have weakened, while sales of tablet computers, smartphones and e-readers have increased. And with the rise of competition from Internet rivals like Amazon.com, shoppers aren't flocking to big-box stores like they used to.

Best Buy is trying to avoid the fate of its former rival Circuit City, which went out of business in 2009, in part by shrinking its square footage footprint. Other retailers with large stores are doing the same. Sears Holdings Co., for example, said earlier this month it would close 100 to 120 stores to become nimbler.

Best Buy lost $1.7 billion, or $4.89 per share, for the period ended March 3. That compares with a profit of $651 million, or $1.62 per share, a year ago.

The company is also hoping to cut cost by $800 million by fiscal 2015.


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  • by TrueVoice Location: California on Mar 30, 2012 at 11:24 AM
    Bound to happen. BestBuy does not have competitive pricing. They are competing against online retailers, who are offering Free shipping and other incentives. If you shop around a little bit, I think you can find better deals and more value for the &&& elsewhere.
  • by DanReeves Location: The Further on Mar 30, 2012 at 08:38 AM
    Lol, I love it when Libs feel that they must defend the government. Anywho I hope the best for ole' Best Buy. I am one of those that would rather go to the store and purchase things the old fasioned way...
  • by Customer Location: Pueblo on Mar 29, 2012 at 12:23 PM
    Went to the Pueblo store for a CD with a limited edition t-shirt.....No employee could find the CD, shirts or the display they were supposed to be in, even though the computer showed they were in stock.
  • by But the government.... on Mar 29, 2012 at 10:57 AM
    told me about how the economy is doing so well.
    • reply
      by Disgusted on Mar 29, 2012 at 12:19 PM in reply to But the government....
      Best Buy's mismanagement is not the government's fault.
      • reply
        by LedHed on Mar 29, 2012 at 02:21 PM in reply to Disgusted
        True! And one retailer's profits (or losses) are in no way indicative of the national economy (which still sucks).
      • reply
        by Liberal huh? on Mar 29, 2012 at 02:46 PM in reply to Disgusted
        LOL....look around comrade...and wipe the kool-aide off your lip.
    • reply
      by How many Seras and K-Marts... on Mar 29, 2012 at 02:45 PM in reply to But the government....
      are closing. Look around people, many, many companies are tanking. It's "managements" fault.....
  • by Man on Mar 29, 2012 at 10:34 AM
    I like best buy. Lots of new products. Good prices.
  • by LedHed Location: Colorado Springs on Mar 29, 2012 at 09:28 AM
    "Huh" is right, BB has been stagnant for many moons now, and this is the end-result. Many are the times I've gone to their website to purchase merchandise, only to discover that they wouldn't ship-to-store or make alternative arragements (they did however, waive the S&H on an item then sent directly to my door once). They need to take a good look at their business model, improve customer service and take a cue from Circuit City's demise if they wish to return to profitability. Good luck, as I'd hate to see another business of this size go under.
    • reply
      by jazzcat on Mar 29, 2012 at 10:48 AM in reply to LedHed
      Do you think it's possible for Best Buy to avoid Circuit City's example? While their prices are slightly better than CC's, their business model isn't that different (market saturation; high reliance on use of consumer credit; expensive overhead). Internet retailers like Amazon, Tiger Direct, and Newegg have made life difficult for brick-and-mortar retailers.
      • reply
        by LedHed on Mar 29, 2012 at 12:22 PM in reply to jazzcat
        You're correct, and on-line purchasing options like those you mentioned may spell the end of "physical" stores and their parent companies. Gonna be a tough fight for any retailer/wholesaler going forward, but there's still a niche (dwindling daily, admittedly) for people without Internet access or who don't trust e-commerce.
  • by Huh on Mar 29, 2012 at 09:12 AM
    I could help the save money and possibly make money in the process. First. Get rid of have the blue shirts that ask if I need help 15 times every 10 minutes and only keep the knowledgable ones. Second. Fix Bestbuy.com so that their prices match the in-store prices so customers don't have to look both places. If its on sale at BB.com then it should automatically apply the sale price at the register. Stop using the excuse the store and the website are two different entities. Customers don't care. Best Buy is Best Buy to us. Third. Better pricing is a must. Even if Best Buy must buy from Amazon and resell it. Kind of hard to sell a TV that is several hundreds more in-store. People will pay a bit more to have it now, but not hundreds more and then add tax on top of it. Personally, I stopped using BB when I had to check their website all the time and then ask the person at the register to match their own price. Customers shouldn't have to do that. Good luck Best Buy.
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