Best Buy Shutting Down A Slew Of Stores, Laying Off Hundreds Of Corporate-Level Employees

03.29.12 6 years ago 2 Comments

Last November, in a post predicting doom for Best Buy and four other tech brands in 2012, UPROXX contributor Dan Seitz said the following…

Part of the problem is that Best Buy is not where gadget-savvy shoppers go. Best Buy instead relies on suburban dads to show up looking for a blender and to leave with an HDTV, an overpriced HDMI cable, and a Blu-Ray player. And every last aspect of that is under assault.

Media is rapidly shifting to a cloud/digital download infrastructure; even DVDs are now coming with digital copies for download. With the economy, shoppers aren’t feeling the need for new TVs, and binge buying is dying off. And many people trust online retailers enough at this point to buy their gear from them, at a cheaper price than Best Buy is willing to, or can, offer.

Now today it looks like Dan might have been on to something. The company announced this morning that it’s closing 50 big box stores in the U.S. and will cut 400 corporate level jobs as part of a major restructuring.

Reports MSNBC:

News of the restructuring came as Best Buy reported its quarterly earnings.

Net loss was $1.7 billion, or $4.89 a share, for the fourth quarter ended March 3, compared with net income of $651 million, or $1.62 a share, a year earlier. Excluding charges, Best Buy earned $2.47 a share.

Sales rose to $16.63 billion, but fell way short of the analyst average estimate of $17.23 billion.

The retailer said it expects its restructuring efforts to save about $800 million in costs by fiscal 2015, including about $250 million in the current fiscal year.

The question to me is this: What the hell took them so long? Best Buy waiting til the second quarter of 2012 to reshift its focus strikes me as the equivalent of roadkill waiting until impact with a vehicle before making a move to get out of the way.

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