Best Buy to cut costs, close some big-box stores

The Washington Times Daily - - Nation -

MIN­NEAPO­LIS | Best Buy Co. said it plans to close 50 big-box stores and open 100 small mo­bile lo­ca­tions in the U.S. in fis­cal 2013 and cut $800 mil­lion in costs by fis­cal 2015. The news came Thurs­day as the big­gest U.S. spe­cialty elec­tron­ics re­tailer posted a fis­cal fourth-quar­ter loss partly be­cause of re­struc­tur­ing charges, but its ad­justed re­sults topped Wall Street’s ex­pec­ta­tions.

Best Buy’s strat­egy of fo­cus­ing on clos­ing some of its hulk­ing stores to con­cen­trate on smaller Best Buy Mo­bile out­lets il­lus­trates the shift­ing na­ture of the elec­tron­ics in­dus­try. Shop­pers aren’t flock­ing to big-box stores as they once did. And sales of TVS, dig­i­tal cam­eras and video-game con­soles have weak­ened, while sales of tablet com­put­ers, smart­phones and e-readers have in­creased.

Best Buy lost $1.7 bil­lion, or $4.89 per share, for the pe­riod ended March 3. That com­pares with a profit of $651 mil­lion, or $1.62 per share, a year ago.

The Min­neapo­lis com­pany said its quar­terly re­sults in­cluded $2.6 bil­lion in charges. They were mostly re­lated to its pur­chase of Car­phone Ware­house Group PLC’S in­ter­est in the Best Buy Mo­bile profit-shar­ing agree­ment and re­lated costs, as well as an im­pair­ment charge tied to writ­ing off Best Buy Europe good­will and re­struc­tur­ing charges.

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