Best Buy store closings were announced Thursday when news came that the electronics company is reformatting their sales portfolio. 50 big-box locations throughout the United States will be shut down in addition to 400 employees being laid off. It's another hit for American retailers after Sears announced closing 120 stores last December.
There's a never-ending change in how the U.S. and the world does business. Typically it means workers pay the biggest price when they lose their jobs. In this global economy bigger being better isn't the only way to profitability. Sometimes it's a matter of consolidating.
The only good news about the Best Buy closures is that the company is opening 100 smaller stores to better serve customers in picking up online orders faster, have staff assist shoppers, and better streamline sales of trending items such as tablets, smartphones, and e-readers.
An exception to the Best Buy closings is two Connecticut stores and one in San Antonio, Texas will have room for expansion. Stores in Minneapolis and St. Paul, Minnesota are selected to be part of a massive test referred to as the "connected store."
A list of 50 locations for which big-box stores are closing hasn't been released by the company yet. There are 1,450 stores nationwide and 2,900 around the world. They want to keep lay-offs at a minimum and hope to save about $250 million this year alone. By 2015, their hope is the streamlining format will save them $800 million in costs.
Will such a strategy work for the store finding itself competing against online giants such as Amazon.com?