Best Buy officials announced Thursday the electronics retailer will close 50 of its U.S. stores and lay off 400 employees at corporate and support levels. On the flip side, the company aims to open 50 stores in China in fiscal year 2013.
Northern Virginia has 10 Best Buy stores, including stores in Springfield on Frontier Drive and in Fairfax at Fair City Mall.
Specific stores targeted for closure have not been announced.
The news comes after the Richfield, Minn.-based company released its fiscal year fourth-quarter earnings, showing a $1.7 billion loss.
The news of closures and downed profits are not a surprise to many.
Best Buy reported shortfalls after its third quarter, and a January 2012 Forbes article suggested the company is moving closer to bankruptcy. "Though the company accounts for almost a third of all U.S. consumer electronics purchases, analysts noted, the company remains a ripe target for more nimble competitors," wrote Larry Downes.
In addition, Best Buy may be falling prey to the trend of "showrooming," where consumers go look at a product in a retail store, but then purchase the item online at a lower price.
Best Buy is planning store remodels on its remaining stores before the 2012 holiday season.
"These changes will also help lower our overall cost structure," said Best Buy CEO Brian J. Dunn in the release. "We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices — which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line."
According to the press release, the company is planning $800 million in cost reductions by fiscal year 2015.