TechCrunch’s Best Buy tag isn’t exactly a heartening place to visit. In the last few months, it “stole Christmas,” been “finished,” and is now “going out of business.” Dire straits indeed for a company that has defied the odds not only against big retail competition but against deadlier online opponents as well for nearly 50 years.
But an announcement today seems to give a little weight to the doom and gloom expected from a tech community that views Best Buy as an anachronism. Best Buy will be closing 50 of its big box stores and laying off some 400 people, mostly on the administrative side. Is it rightsizing or just plain attrition?
CEO Brian Dunn sees it as a necessary measure to reduce costs and make the chain’s retail experience more relevant to the average consumer. “We’re going to have more doors and less square footage,” he said, suggesting that further big box closures may be in the company’s future, but at the same time assuring that said closures were part of an overall strategy.
The sprawling megastores cost far more and see more competition from the likes of Amazon and Newegg, whereas smaller stores with popular items and services save on both space and costs. One has to admit that it makes a certain amount of sense. Best Buy is in the retail business, not the warehousing business, and at any rate they can’t compete in the latter category with online storefronts.
The 400 jobs, which Best Buy said would mostly come from its headquarters, would be enough to raise an eyebrow, but they neglect to estimate the real number of jobs that will be lost as a result of the closures. The employees of the 50 stores could easily amount to a couple thousand with floor staff, management, warehousing, and so on. Needless to say, it’s not a number they care to shout from the rooftops. It would take the wind out the sails just when the new plan needs a boost.