Best Buy is shutting down 250 mobile outlets

[Greg S]

Best Buy CEO Hubert Joly gave notice to employees this past Wednesday that all 250 mobile phone stores located in the US will be closing before the end of May. The small retail locations first made an appearance back in 2006 just one year before the introduction of the first generation iPhone.

At their peak, Best Buy was running over 400 mobile store locations. For the past several years, that number has been on a steady decline. Now that competition has risen in the mobile space, profits for third-party retailers have been affected. "Fast-forward to 2018 and the mobile phone business has matured, margins have compressed and the cost of operations in our mobile stand-alone stores is higher than in our big box stores," Joly said in his notice.

Each mobile store location averages 1,400 square feet compared to a traditional Best Buy store that uses around 40,000 square feet of floor space. Despite being significantly smaller and requiring far fewer employees, the electronics retailer is having trouble turning profits from smaller locations. Rising rent and labor costs as well as competition from online sales have all caused difficulties.

Although many may not miss Best Buy's small storefronts found in malls and as kiosks, the business accounts for 1 percent of its revenue. Even though the dedicated phone shops will all be closing, Best Buy will continue to sell mobile devices in its regular big-box stores and online.

It may sound as though Best Buy is really struggling to get by, but that truly is not the case. In fact, its stock is up over 60 percent since last year and is approaching an all time high. This is mainly attributable to the 33 percent market share that Best Buy holds on TVs and strong sales growth in recent months. Only 6 percent of the mobile phone market belongs to Best Buy, but executives have already shared plans on how they plan to grow this segment.

There are currently over 1,000 Best Buy stores operating. Many employees of mobile locations will have the opportunity to transfer to nearby stores, but those let go will be receiving severance pay.

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https://www.techspot.com/news/73509-best-buy-shutting-down-250-mobile-outlets.html

 

[QuantumPhysics]

Best Buy mobile never made any sense.

First of all, I would go to them to look for mobile device items that they didn't even carry.

Secondly, the carrier stores, Amazon and Ebay have most smartphone sales on lockdown.

I admit, I worked for Best Buy in 2005. Store 483 in Rego Park. I sold their pathetic warranties and put in excellent customer service. They refused to pay me more than $10 an hour like Circuit City did. I cold quit, finished school and never looked back. To be perfectly honest, watching them crumble will give me a certain level of enjoyment. Anyone who works for them better be getting ready for some merger or whatever their fate will be.

 

[gusticles41]

Best Buy mobile never made any sense.

First of all, I would go to them to look for mobile device items that they didn't even carry.

Secondly, the carrier stores, Amazon and Ebay have most smartphone sales on lockdown.

I admit, I worked for Best Buy in 2005. Store 483 in Rego Park. I sold their pathetic warranties and put in excellent customer service. They refused to pay me more than $10 an hour like Circuit City did. I cold quit, finished school and never looked back. To be perfectly honest, watching them crumble will give me a certain level of enjoyment. Anyone who works for them better be getting ready for some merger or whatever their fate will be.

Former 757 employee here. Best Buy is doing better now than when I was with them several years ago...Granted I worked in back at the Squad so I never cared much how BB was doing overall. But from what I can tell, Hubert's been doing a very good job getting the company back on track, though I do agree - It's a matter of time before they lose their footing.

Closing the small Mobile stores makes sense to me - Anything to get more foot traffic in their big stores is a win.

 

[Raytrace3D]

I use to work for Jerk-it City back in the early 2000's selling cell phones... ugg... what a complete waist of my life. lol It makes me smile a little when I see retailers who "sell" cell phones die a little.

 

[Dimitrios]

I was in a rush bought the AMD RX560 4GB around April 2017 for $130 and now BESTBUY sells the same one for $190+. You would think with the markups on Graphics cards BESTBUY wouldn't be "cutting the Fat " like moves like in this article.

 

[texasrattler]

Best Buy mobile never made any sense.

First of all, I would go to them to look for mobile device items that they didn't even carry.

Secondly, the carrier stores, Amazon and Ebay have most smartphone sales on lockdown.

I admit, I worked for Best Buy in 2005. Store 483 in Rego Park. I sold their pathetic warranties and put in excellent customer service. They refused to pay me more than $10 an hour like Circuit City did. I cold quit, finished school and never looked back. To be perfectly honest, watching them crumble will give me a certain level of enjoyment. Anyone who works for them better be getting ready for some merger or whatever their fate will be.

They aren't going anywhere anytime soon. Target will fall before them, maybe even to Amazon. Other companies will likely fall well before BB does.

Just because you didn't like the job doesn't mean others employees didn't love what they did. Btw, claiming to have good customer service means nothing. Most actually do, its simply helping. Some just choose not to.

Retail was never meant to be a place where you could make a lot of money unless commission is involved. BB end all that a long time ago. Things are a lil different and you can now get decent money out of them and if your a higher up employee you can get bonuses and of course higher pay. No I'm not talking about being a manager or anything. If you do go after one of those positions, 6 to 7 figures have been seen before. Knew a guy who was getting like $100K for running a store. Downside is, you have a lot of responsibility that comes with that. Screw up and they will let you go.

 

[texasrattler]

I was in a rush bought the AMD RX560 4GB around April 2017 for $130 and now BESTBUY sells the same one for $190+. You would think with the markups on Graphics cards BESTBUY wouldn't be "cutting the Fat " like moves like in this article.

So do a lot of retailers. So they aren't suppose to follow the market? It's not their fault supply is low. Blame manufacturers.
If cards are flying off the shelf and your running a business and see supply is low, your gonna market them up due to supply. Why, because they will still sell and you will make profit, you know profit is what your in business to make. So quit acting like you wouldn't be doing the same if it was your company, cause the fact is you would, we all would. It's business for a reason.

 

[texasrattler]

Best Buy mobile never made any sense.

First of all, I would go to them to look for mobile device items that they didn't even carry.

Secondly, the carrier stores, Amazon and Ebay have most smartphone sales on lockdown.

I admit, I worked for Best Buy in 2005. Store 483 in Rego Park. I sold their pathetic warranties and put in excellent customer service. They refused to pay me more than $10 an hour like Circuit City did. I cold quit, finished school and never looked back. To be perfectly honest, watching them crumble will give me a certain level of enjoyment. Anyone who works for them better be getting ready for some merger or whatever their fate will be.

Former 757 employee here. Best Buy is doing better now than when I was with them several years ago...Granted I worked in back at the Squad so I never cared much how BB was doing overall. But from what I can tell, Hubert's been doing a very good job getting the company back on track, though I do agree - It's a matter of time before they lose their footing.

Closing the small Mobile stores makes sense to me - Anything to get more foot traffic in their big stores is a win.

There is nothing to lose. Their name is stronger than ever. Wages have gone higher across the board. Granted every area and position is different.

You could say the same for any business right now as Amazon is breathing down a lot of throats. Look at Target, they may get gobbled up by them.