Electronics giant Best Buy today announced its plans to close 50 of its U.S. stores as part of a plan to strengthen the company's brand and improve overall cost structure. The announcement came at the same time as Best Buy's fourth fiscal quarter financial results. The company said it will close 50 of its big box stores next year while modifying others and adding 100 Best Buy Mobile locations. CEO Brian Dunn said the move would provide a better shopping environment for Best Buy customers across multiple channels and improve performance and profitability. The shuttering of 50 shops is part of an $800 million multi-year cost reduction program.
"These changes will also help lower our overall cost structure," said Dunn. "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. At the same time, we will continue to accelerate our key initiatives --- growing connections and services, expanding our digital capabilities and growing our business in China."
Best Buy's strategy is to focus on service, such as expanding the benefits under its Reward Zone Silver loyalty program, in order to better compete with the likes of Amazon. The plan is to offer Reward Zone Silver customers free expedited shipping, premier access to many of Best Buy's most popular products and major sale events, a free house call from the Geek Squad, and 60-day no hassle returns and price-match policy.
Best Buy this morning posted a GAAP net loss of $1.7 billion, or ($4.89) per share, for its fourth quarter. This is compared to a net income of $651 million, or $1.62 per diluted share, for the same period last year.