Best Buy Closing Up to 30 Large-Format Stores

Best Buy (Minneapolis) is planning $200 million in capital expenditures in its coming fiscal year, mainly to make some major adjustments to its store fleet. Specifically, the electronics retailer plans to close 20 to 30 large-format stores, remodel a total of 10 existing stores, and open 10 or so additional outlet stores.

Best Buy CEO Corie Barry disclosed those moves in a conference call with analysts in the wake of the retailer releasing its fiscal fourth-quarter and full-year results. Barry noted that the retailer’s planned expenditures are down about $100 million from the prior year.

“At the same time, we will continue to evolve our operating model to match the lower selling square footage and the ongoing evolution of our business model,” Barry said during the call. “Over the past three years, our overall headcount has declined by approximately 25,000 people, or 20 percent, as we adapted to the shift in customer shopping behavior and in the effort to drive more flexibility.”

In its just-completed fiscal year, Best Buy had just under $46.3 billion in sales, a decrease from $51.7 billion a year earlier. Same-store sales fell 9.9 percent, with growth in gaming and tablets offset by drops in home theater, appliances and mobile phones.

And the retailer sees challenges ahead.

“As we enter FY24, the consumer electronics industry continues to feel the effects of the broader macro environment and its impact on consumers,” CFO Matt Bilunas said in the earnings release. “As a result, our outlook assumes comparable sales decline 3 percent to 6 percent for the year, with the most sales pressure in the first quarter, as year-over-year comparisons ease through the year.”