Electronics retailer Best Buy has announced that it will close 50 big box retailers, cut 400 jobs in the corporate and support area and open 100 mobile locations by fiscal year 2013. The company plans to save $800 million by 2015.
Best Buy published its fiscal fourth year quarter and full year 2012 results Thursday. In its report, it discusses its focus on a transformation strategy, which includes multi-year cost reductions, growth initiatives, improved customer service and United States store format improvements.
What this means for Best Buy is that they are planning on shutting down 50 big box stores and opening up 100 small format stand-alone stores. It also plans to cut 400 jobs in its corporate and support areas. These measures are projected to be completed by the fiscal year 2013. Furthermore, the special electronics retailer wants to save $800 million within the next three fiscal years, including $250 million by next year.
For the period ending Mar. 3, Best Buy lost $1.7 billion compared to the $651 million in profits made one year ago. Part of this is due to U.S. consumers not purchasing video game consoles, televisions and digital cameras, but tablet computers and e-readers have increased.
“In order to help make technology work for every one of our customers and transform our business as the consumer electronics industry continues to evolve, we are taking major actions to improve our operating performance," said Brian J. Dunn, Best Buy CEO. “As a result, we believe these actions will position us to grow earnings, improve ROIC, and increase value to our shareholders in the years ahead.”
In the morning trading session, Best Buy’s stock fell 32 cents to $26.30.
Despite offering big discounts on various items, such as flat screen televisions, to lure consumers from its competitors, like Amazon and Wal-Mart, Amazon is still seeing substantial growth in its electronics department. The online retailer offers prices 17 percent lower on average.