Best Buy is planning to close all of its approximately 250 smaller-format mobile phone stores, CEO Hubert Joly said to workers Wednesday in an internal update, which was reviewed by CNBC.
The stores, which are about 1,400 sq ft in measure compared with Best Buy’s bigger boxes of 40,000 sq ft, are planned to near to the finish of May, he said. The mobile stores are almost solely located within malls, with a couple of scattered all through outdoors strip focuses.
“We feel good about the opportunity to retain customers and transition them to another one of our sales channels,” Joly kept in touch with specialists. “85% of existing standalone Mobile stores are within three miles of a Big Box store.”
The Star Tribune initially provided details regarding the news Wednesday afternoon.
According to Joly, income from Best Buy’s standalone mobile stores speaks to around 1% of the gadgets retailer’s overall sales, and the square footage of the stores altogether accounts for about 1% of Best Buy’s total real estate footprint.
The terminations come as operating a store exclusively for mobile devices isn’t as profitable as it used to be, Joly explained. “We believe the best way to serve customers is to sell phones in channels where they have access to our whole range of connected devices.”
Best Buy opened its first mobile phone store in 2006, before Apple’s first iPhone launching.
As May approaches, Best Buy will offer representatives the opportunity to find other occupations internally or transition to an “in-home advisor” part. Severance will be given to those individuals who choose to leave the company, Joly said.
Already this year, a handful of other major retailers including Walmart, Toys R Us and Sears Holdings have announced plans to shade stores, leaving an excess of vacant boxes behind, and many within malls. Best Buy made it clear, however, that its bigger boxes and its operations within Canada and Mexico won’t be impacted by the news.
“The decision to exit this part of our business was made in keeping with our principle of continuous optimization,” Joly said.
Best Buy is booked to report fourth-quarter earnings before the chime Thursday.