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Best Buy Co. Inc. (NYSE:BBY) yesterday announced its intent to close its 257 remaining Best Buy Mobile stand-alone stores in the U.S. effective May 31.
The decision will impact from about 285,000 to 350,000 square feet of inline mall store space based on the average size range of the stores.
Best Buy began rolling out the specialty stores in 2007 and had most opened by the end of 2011.
“We began opening these stores more than a decade ago, before the iPhone was even launched. Back then the mobile phone business was in a period of rapid growth and margins were high” said Hubert Joly, CEO of Best Buy. “Fast forward to 2018 and the mobile phone business has matured, margins have compressed and the cost of operations in our stand-alone stores is higher than in our big-box stores.”
The closure of the small-format stores are estimated to negatively impact revenue by $225 million with flat to slightly positive impact on operating income, the company said.
The move does not mean the company is getting out of the mobile business. Mobile product and service sales will continue in its large format stores where the company is still experiencing comparable sales growth.
