Your local Best Buy store may be right along the razor's edge this week as the electronics giant makes relatively large cuts to their retail footprint amid slow profit growth. Included in this cut are 50 big box stores inside 2012 as well as an estimated 400 jobs. The jobs, surprisingly enough, are said by Best Buy to be cutting mainly from corporate headquarters - this pointing toward a restructuring of the company's business as well as its physical presence in the United States.
These cuts come after a $1.7 billion dollar loss in their most recent fourth quarter, this after a $651 million dolor profit in the same quarter a year previous. These numbers strike hard in a market where online sales and digital content is becoming a more powerful market each day. This new move will have Best Buy reducing their U.S. retail square foot footprint by 20 percent, this about double the amount they'd originally intended when cuts were first discussed this year.
CEO Brian Dunn noted the following in a statement:
"These changes will also help lower our overall cost structure. We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices --- which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line." - Dunn
Best Buy's format will be changing over to their more profitably smaller format Best Buy Mobile stores in the USA. They've currently got 300 Best Buy Mobile stores in the mix here in the USA today, with a total of 600 to 800 planned to be in effect by the end of 2012. Best Buy also plans on expanding aggressively in China soon.
[via Star Tribune]