Implosion at Best Buy: Company Misses Analysts' Revenue Expectations by $500 Million, Plans Store Closings, Layoffs, Shift in Retail Focus Business Insider
Retail electronics chain Best Buy revealed plans to close 50 stores and lay off 400 employees as it shifts its focus to put more emphasis on the mobile segment, Business Insider reports.
The revelations accompanied the company’s fourth-quarter report, which included results that beat expectations on the bottom line but fell short in revenues.
Revenue grew 3% in fourth-quarter 2011 to $16.6 billion, some $500 million short of the $17.15 billion forecast in a Bloomberg poll of analysts, the story reports.
The report notes: “The quarter also benefitted from an extra week in the company's fiscal calendar — excluding the week would mean revenue actually fell 1.1 percent. Shares were down 6 percent in the first minutes of trading.
“The company saw same-store sales decline 2.3 percent during the period, highlighting its difficulties as the U.S. economy gained steam during the first few months of 2012. Best Buy saw weakness across the board, with sales suffering in gaming, notebooks, digital imaging and televisions.”
Best Buy announced it plans to launch 100 new mobile locations as part of a retooling of its domestic stores, the report says.
Business Insider adds: “Best Buy is targeting more than $800 million in cost savings by 2015, largely expected through layoffs and the aforementioned store closings. The targets are roughly split between corporate, retail and declines in costs of goods sold. The company will lay off 400 employees within its management and support channels.”