MINNEAPOLIS – In order to grow, Best Buy is shrinking.
The largest U.S. specialty electronics retailer for years expanded quickly by opening big-box stores across the country. But shoppers have started using the hulking stores as showrooms where they can test out products before buying them cheaper elsewhere.
To revamp the struggling chain, Best Buy said Thursday it plans to close 50 of its U.S. big box stores, cut 400 corporate jobs and trim $800 million in costs. The company, which has about 1,400 U.S. locations, also plans to open 100 smaller and more profitable Best Buy Mobile stores throughout the country.
Best Buy is trying to avoid the fate of its rival Circuit City, which liquidated in 2009. Sales of TVs, digital cameras and videogame consoles have weakened, while sales of lower-margin items like tablet computers, smartphones and e-readers have increased. The rise in competition from Internet rivals and discounters also has hurt electronics retailers.
To better compete, Best Buy is shaking up its business. In addition to closing some of its big box stores, the company said it will focus on what sets it apart from its rivals: trained sales staff that can help shoppers get the most out of their tablets, TVs and other electronic devices, including tech support from its “Geek Squad” service and repair unit.