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Best Buy closing mobile-only stores due to high costs

by Justin Herrick | March 1, 2018March 1, 2018 11:00 am PST

More than a decade ago, Best Buy launched specialty stores that focused exclusively on phones and tablets. It was a way for the electronics retailer to directly connect with consumers as the mobile industry started booming. Shoppers didn’t have to navigate a big box store. Instead they could walk into a Best Buy Mobile store and find exactly what they want.

Now the electronics retailer is ready to close all 250 locations. Best Buy announced that it’s far too expensive to keep the mobile-only stores open, so the solution is to shut down all of them in 2018.

High costs bringing down Best Buy Mobile is understandable. Margins on mobile devices have shrunk over the years, and that hurts retailers significantly. It’s also beneficial that Best Buy’s big box stores sell other products and not just mobile devices and wireless service.

Here’s a statement from Best Buy CEO Hubert Joly:

“The mobile phone business was in a period of high growth and margins were high. Fast-forward to 2018 and the mobile phone business has matured, margins have compressed and the cost of operations in our mobile stand-alone stores is higher than in our bix box stores.”

The company didn’t comment on the number affected by the shutdown; however, it did commit to placing them in other jobs at Best Buy if possible.

As part of Best Buy’s overall revenue, the mobile-only stores represent around 1%. That’s clearly not enough to view the business as viable. Best Buy will continue selling phones and tablets in its regular stores nationwide and online. The electronics retailer believes there’s still reason to expect mobile devices and wireless service to experience growth, just not through Best Buy Mobile.

Engadget

Justin Herrick

Justin is easily attracted to power buttons. His interest in technology started as a child in the 1990s with the original PlayStation, and two...

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