Best Buy to Close 50 Stores
MARCH 29, 2012 ● After reporting a $1.7 billion loss on March 3, Best Buy announced that it would close 50 stores during the next year, as well as cut 400 jobs from its corporate and support personnel rolls. The retailer wants to cut $800 million by its fiscal year 2015.
Impact: Best Buy is clearly in trouble even though 50 stores closing is not that many in the grand scheme of things. We think that the January Forbes article entitled “Why Best Buy is Going Out of Business…Gradually” was spot on. The summary of that detailed article was that Best Buy can’t compete with online retailers like Amazon. However, that article highlights another key problem with Best Buy, poor customer service. The problem is that when a company like Best Buy struggles with profitability they tend to cut jobs and that becomes a downward spiral as fewer employees means less customer service.