Over the last few years major companies, including Bath & Body Works, CVS, etc. closed down many of their stores, and Best Buy too is doing the same.
With the huge demand Best Buy & these other brands entail, customers are shocked and want to know what could have possibly led them to close down such a massive number of stores.
If you are a loyal customer of Best Buy and want to know is Best Buy is going out of business, then stick to this article till the end!
Is Best Buy Shutting Down Permanently?
Best Buy is not shutting down permanently, but the company has closed many of its stores in different locations and is planning to close down even more stores in the future.
Best Buy began closing down its stores in the year 2019, with 20 of its stores shutting down that year. Later in the year 2020, they closed down 20 more stores owing to Covid-19.
It all started with the pandemic, and in early 2021, the retail store announced that they were planning to close down even more stores that year.
Although the company did not reveal the exact numbers they planned on closing, the media suggested that at least 60 Best Buy stores were shut down in 2021.
On 29 October 2022, the company’s financial report revealed that there are only 925 Best Buy stores in the United States. And the closure didn’t stop here.
The retail chain has closed down 7 stores already in the last quarter of 2022, with its most recent closures being in California and NewYork.
And this is not it; Best Buy plans to close down more stores by the end of 2023.
Closing History of Best Buy
- 2019 – 20 stores
- 2020 – 20 stores
- 2021 – Approximately 60 stores
- 2022 – More than a dozen stores
- 2023 – 3 stores
Why Are So Many Best Buys Closing?
Best Buy is a very popular and loved retail chain, and people are confused as to what is forcing such a popular brand to close down the Best Buy stores one after the other.
Well, there are two main reasons for this.
Best Buy, like many other big companies, was affected by Covid-19, and to cover the loss incurred that year, it had to close down some of its stores.
But right now, the rising cost of inflation, volatile market and increased cost of every little thing is making it difficult for the company to reduce its production cost and streamline its operations.
This is the reason why so many best buys are closing.
Are They Cutting Employees?
The latest annual report of Best Buy cited that there are 105,000 employees across Canada and the United States as of the fiscal year 2022.
The company announced at the beginning of the year 2022 that they are planning to lay off 0.7% of its workforce, and the anticipated lay offs equates to 735 jobs.
The step was taken as a cost-cutting measure because the company expected to see a decline in sales of 13% as compared to the rise of sales by 19.6% during the same time.
The company has also been closing down its stores over the few years, so cutting on employees who were working in these stores only made sense.
What Is The Future Of Best Buy?
In the year 2019, Best Buy laid out its target to make revenue of $50 million by FY25.
he company saw $8 billion in revenue growth and earned approximately $51.8 billion in revenue in the year FY22 surpassing their FY25 target ahead of schedule.
So the company is performing well as of now.
Best Buy stated that the reason why they were able to achieve their target so quickly was because of the rise in demand for electronic gadgets and their efforts towards evolving their business to meet the latest demand.
Here’s what Best Buy plans are for the future:
- Their product assortment for the fitness and wellness category grew more than 650%, and they plan to introduce a premium experience in 90 stores.
- Best Buy introduced 250 new products, including scooters, e-bikes, etc., and they plan to add these products to 900 stores.
- They plan to remodel 50 locations and transform 300 locations by FY25.
- For FY23, Best Buy wants to double the number of outlet stores and expand beyond major appliances. They plan to include gaming consoles, computers, and mobile phones too.
How Many Best Buy Outlets Are There in USA as of 2023?
As of January 2023, there are a total of 1,041 Best Buy Stores in the United States.
The state that has the most number of Best Buy Stores in the U.S. is California, with 145 retail stores, which accounts for 14% of all Best Buy stores.
Also, there are Best Buy retail stores in a total of 54 states and territories, 786 cities in the U.S.
Top 10 States with the majority Of Best Buy retail stores
| State / Territory | Number of Best Buy Retail Stores |
|---|---|
| California | 145 (14%) |
| Texas | 106 (10%) |
| Florida | 65 (6%) |
| New York | 53 (5%) |
| Illinois | 45 (4%) |
| Ohio | 37 (4%) |
| Pennsylvania | 34 (3%) |
| North Carolina | 34 (3%) |
| Virginia | 32 (3%) |
| Michigan | 31 (3%) |
Top 10 cities with the majority of Best Buy retail stores
| City | Number of Locations |
|---|---|
| Houston | 12 |
| San Antonio | 7 |
| Miami | 6 |
| New York | 6 |
| Oklahoma City | 6 |
| Jacksonville | 5 |
| Austin | 5 |
| Aurora | 5 |
| Las Vegas | 5 |
| Cincinnati | 5 |
How Many Outlets Best Buy Will Close And When?
Best Buy is set to close a few more stores in 2023. Best Buy plans on closing one store in Missouri and two stores in Tennessee on March 4, 2023.
The location where Best Buy stores will be closing are:
- Hixson and Farragut in Tennessee
- St. Joseph in Missouri
What Is The Weakness Of Best Buy?
Here are a few weaknesses of best Buy:
- Low Flexibility: Best Buy still depends heavily on brick-and-mortar locations when e-commerce is growing at the rate of 15.4% annually. Although the company has started selling its products online, they need to try more to keep up with the latest trends.
- High dependency on luxury products: The company is highly focused on selling luxury items or gadgets, the demand for which can fall off very quickly during an economic crisis or in unexpected events like Covid-19. Adding more range of products can be useful for the company to survive even during tough times.
- Restricted Locations: Best Buy has retail outlets only in Canada, Mexico, and the USA; this weakness affects their market and sales when compared to competitors like Amazon, which is capturing the entire world. An effort to expand their market globally could be a good move.
Is Best Buy in debt?
As per the financial report of Best Buy, in October 2022, the company had a debt of $1.142B, which is a decline of 6.62% compared to the previous year.
Here’s a look at how Best Buy’s debt has been doing over the last three years:
- Year 2022 – Annual debt was $1.216B, which is a 2.95% decline from 2021.
- Year 2021 – Annual debt was $1.253B, which is a 0.32% decline from 2020.
- Year 2020 – Annual debt was $1.257B, which is a 5.63% decline from 2019.
Although Best Buy still has a lot of debt, the company’s total debt has been decreasing year-on-year, as per the data.
Commonly Asked Questions
1. When did Best Buy almost go out of business?
The year 2012 was dreadful for Best Buy, and the company almost went out of business that year.
The main reason for this was that customers were coming to Best Buy stores only to test products and to buy them from Amazon later for a lesser price.
During that time, the employee engagement of Best Buy was also low, and even the CEO resigned after admitting to an improper affair with an employee.
2. What is Best Buy struggling with right now?
Amidst the current economic crises, Best Buy is seeing weaker demand for expensive electronic goods that they sell and are struggling to make impactful sales.
3. Who is the owner of Best Buy?
Richard Michael Schulze, an American Billionaire, born in January 1941, is the founder of Best Buy.
4. Why did Best Buy fail in China?
After studying the Chinese market for three years, Best Buy decided to open its stores in 2006.
The Best Buy stores mimicked their American counterpart in selling tactics, layout, etc. And even the products that they were selling, such as home entertainment systems, coffee machines, etc., were American staples.
As such, they failed to attract customers and eventually closed down all their stores and exited China in 2011.
Best Buy Social Media Contacts
Have more queries? Get in touch with Best Buy directly:
Wrapping Up
So all the economic crises and inflation in the US and globally is the main reason why Best Buy is closing down so many stores.
This step is taken as a cost-cutting measure to reduce its production cost and streamline its operations.
We hope this article on is Best Buy going out of business in 2023 was helpful to you.
Shefali Jain is a Content Writer & Editor at USWorkforce.org
After completing her graduation in hospitality, Shefali decided to follow her passion and started writing. Shefali has been writing for two years now and contributes to our website as a skilled editor and content writer with strong research skills. Writing product and service reviews, biographies, and book reviews are some of her key areas, among many others in which she specializes. In her time at the organization, she has written and edited content on a range of topics, including employment law, human resources, and business management.