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Best Buy To Cut Costs And Close Stores

By: KKTV/AP
By: KKTV/AP
AP

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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