Best Buy closing stores to cut costs - WMC Action News 5 - Memphis, Tennessee

Best Buy closing stores to cut costs

(WMC-TV) - The world's largest consumer electronics chain is closing stores. Best Buy is shutting down dozens of stores in the U.S. and some of them could be in the Mid-South.

Best Buy went from a profit in 2010 to a deficit in 2011 and lost $1.7 billion in the fourth quarter.

Now the company's restructuring and cutting back.

"Consumers have definitely cut back on spending going back to 2007," said Doug Campbell, director of the Center for Economic Education at the University of Memphis. "In terms of middle class families going to Best Buy, I don't think we've begun to see that type of recovery."

He says the economy continues to improve slowly, but the recovery is being hurt by rising gas prices.

Best Buy plans to close 50 stores nationwide and concentrate more on its smaller Best Buy mobile outlets, a model that apparently engages the consumer more effectively.

"Rather than just setting people free in this giant room filled with almost every kind of electronic you could ever want, they are really trying to engage the consumer and talk to them," Campbell said.

It's unclear right now which stores will be closing and when they could shut down for good.

Best Buy hopes to cut some $800 million in costs over the next three years.

"We are taking the necessary steps this next year to evolve our total retail store strategy, and make it even easier for customers to shop with Best Buy and access our services... We are working to ensure the impact to our employees will be as minimal as possible, while serving all customers in a convenient and satisfying way," a company spokesperson said in an email. "We will announce details about specific store locations and timing for closings once they are finalized."

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