Selling consumer electronics isn’t as easy as it used to be for Best Buy. The big-box retailer is closing 50 stores and compensating employees based on customer service after its fiscal fourth-quarter sales fell short of expectations.
The company today reported a fiscal fourth-quarter net loss of $1.7 billion, on revenue of $16.63 billion, up 3 percent from a year ago.
Best Buy’s problem: Amazon. Best Buy has been trying to grow its e-commerce business to compete better, but the big-box approach to selling consumer electronics isn’t what it used to be. That reality has Best Buy thinking small.
The company outlined the following moves:
- It will cut $800 million in costs by fiscal 2015.
- Close 50 big-box stores this fiscal year.
- Open 100 Best Buy Mobile and small stores this year.
- Boost online revenue by 15 percent.
- And Best Buy will change its employee compensation model to revolve around customer service and business goals.
“The company is gradually becoming a physical showroom for online retailers,” said Wedbush Securities analyst Michael Pachter.
The company is also closing 11 stores in the UK, and:
As part of the plan to fix its troubles in Europe, Best Buy says that it will bring its “Wireless World” experience to some of the 2,500 small box mobility stores it currently operates in Europe.