“Best Buy Co Inc. will close its 257 remaining stand-alone mobile stores in the U.S. effective May 31,” Tonya Garcia reports for MarketWatch. “The news came amid better-than-expected fourth quarter earnings that saw same-store sales at the consumer electronics retailer rise 9%.”
“Best Buy opened its first mobile store before the launch of the Apple Inc. iPhone,” Garcia reports. “‘Back then the mobile phone business was in a period of rapid growth and margins were high,’ said Chief Executive Hubert Joly on the earnings call, according to a FactSet transcript. ‘Fast forward to 2018 and the mobile phone business has matured, margins have compressed and the cost of operations in our stand-alone stores is higher than our big-box stores.'”
“Best Buy has beefed up its mobile offerings and experience in its big-box stores and online. Mobile phones, along with gaming, appliances, smart homes, wearables and home theater were the largest drivers of same-store sales growth for the quarter,” Garcia reports. “The Best Buy Mobile store closures are expected to hurt revenue by about $225 million, with flat-to-slightly-positive impact on operating income.”
Read more in the full article here.
MacDailyNews Take: It’s a no-brainer to close them if they cost more to run than they bring in.