Best Buy Is Closing 17 Stores This Week, With Dozens More to Come
The CEO announced closure plans during an earnings call yesterday.
When you're in the market for a new device or gadget, Best Buy is likely one of the first retailers that comes to mind. The signature yellow and blue color scheme is a mainstay at shopping hubs across the country, but that may soon be a thing of the past. Best Buy is closing approximately 17 locations this week, with dozens more on the docket for 2023, executives recently announced. Read on to find out which stores are closing and why.
Several stores are closing tomorrow.
During a March 1 earnings call, Best Buy CEO and director Corie Sue Barry stated that Best Buy is planning to close 17 stores this week, identified "through our normal stringent lease review process."
Best Life previously reported that a Best Buy store in Farragut, Tennessee, is closing on March 4, as is a location in Hixson, a suburb outside of Chattanooga. The Best Buy in St. Joseph, Missouri, is closing as tomorrow, too, and Axios reported that two stores in the Minneapolis-St. Paul area of Minnesota are departing as well. The Best Buy in Shakopee is closing permanently, but the store in Blaine has plans to reopen as an outlet store, per Axios.
During the earnings call, Barry didn't provide any additional details on the 17 closing stores. Best Life reached out to Best Buy for more information on the closures, but has yet to hear back.
More closures are slated for the remainder of 2023.
Tomorrow will be a sad day for loyal Best Buy customers, but shoppers can expect many more closures in the coming months. Yesterday, Barry also told investors that the retailer will be closing "20 to 30 large format stores," this year.
Again, the CEO didn't mention which stores this will impact, nor when exactly they will close. However, she did say that Best Buy will "continue to close an average of 15 to 20 traditional large-format stores per year," as part of a lease review process.
According to the company's annual report for fiscal year 2022, Best Buy has plans to close stores through the beginning of 2025.
"We continuously monitor store performance as part of a market-driven, omnichannel strategy," the 2022 report reads. "As we approach the expiration of leases, we evaluate various options for each location, including whether a store should remain open."
Plans to close up to 30 stores are "consistent with prior-year trends," the retailer noted in the report.
Best Buy is also giving some stores a makeover.
During the earnings call, Barry noted that Best Buy will also be opening 10 outlet stores, remodeling two of its medium-core format stores, and implementing eight experiential store remodels.
"This format has more premium experiences in a 35,000-square-foot selling area, showcasing the very best of Best Buy," Barry said of the experiential format. But in general, these moves are strategic.
"Stepping back, we expect the evolution of our store portfolio and operating model to drive sales lift and efficiencies over time," Barry told investors. "Most importantly, these changes are necessary to relieve the pressures of a changing world, a world in which customers are in control and increasingly more digital and the cost to operate physical stores such as rent and labor are not likely going to come down."
The news coincides with results from the last quarter, with revenue down by roughly 10 percent. Like many other retailers, Best Buy attributed this drop to ongoing inflation. Barry anticipates "continued volatility," while Best Buy prepares for "another down year" for the consumer electronics industry as a whole.
Best Buy shuttered several stores over the past three years.
According to a company document outlining store count, as of Oct. 29, 2022, Best Buy had 925 U.S. Best Buy stores in operation. Over the past three years, Barry told investors that Best Buy has shuttered 70 large format stores, which accounted for 7 percent of its store footprint. However, Best Buy simultaneously continues to remodel and relocate stores, also opening four new stores since 2020.
Ahead of the impending Tennessee and Missouri closures, Best Buy shuttered some locations on both the East and West Coasts. In late Oct. 2022, Best Buy closed a store on the Upper West Side of New York City, and closed another location in Riverbank, California.