Best Buy Co. Inc. announced on Thursday that it will close 50 big box stores and eliminate 400 positions.
By the fall, Best Buy’s "big-box stores in the Twin Cities will either be closed — or shrunk and renovated."
The corporation is trying to reduce costs by about $800 million and adjust to a changing marketplace by reducing the size of their stores and focusing on establishing businesses with less overhead like the100 smaller Best Buy Mobile stores they will be opening across the country.
Hopefully the company will redistribute its workforce wherever possible so that people don't have to wait in the unemployment line.
It looks like this move may have impacted the value of the company's stock: Yesterday Finance & Commerce reported that "news of the store revamp came as Best Buy’s stock fell as much as 9 percent in Thursday morning trading amid fourth-quarter sales that did not meet analysts’ expectations. The stock closed down $1.85 per share, or 6.95 percent, to $24.77." But today Best Buy (NYSE:BBY) has been upgraded by TheStreet Ratings from "hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. [And] feel these strengths outweigh the fact that the company has had sub par growth in net income."
As technology continues to get smaller and thinner there is less reason to operate out of stores that resemble warehouses.
One Twitter user thinks that their store experience was unsatisfactory and thinks the products will break his bank:
With Best Buy closing stores, where on earth where I find high pricedr electronics and sales staff that doesn't know the product?!
Apparently this man is not alone. Many people posted on the previously mentioned article from Finance & Commerce:
"You need to close! Your stores are too expensive anyway. The average person can’t afford to shop there."
"Agreed with kmf, … they suck, I cant believe they are still in buisness, waaaaaaaaaaaay overpriced stuff. can get anything they sell somewhere else for at least one third less the price. horrible store. cant believe people shop there. I needed a power cord, $25.00 dollars, went to another store, ten bucks. it was the last chance i will ever give them."
"Best Buy will not accept unopened returns (even for cables) after 30 days. They do not respond to customer service questions via email to their contact center on their web site. Lots of people I know, including me, are boycotting Best Buy. Sure, average TV prices have fallen but there are still plenty of expensive TVs to sell. Do you think their customer service policies may also be at fault??? Companies that fail their customers will eventually fail."
Tell us what you think of Best Buy? Do you miss Circuit City?