Best Buy planning major store changes, closures in 2024

Shopping for a new TV or tablet can be a daunting experience. 

Unless you lean on the techie side and know exactly what you're looking for, chances are you prefer going in person to a brick-and-mortar retail store to get a perspective on your different potential options. 

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This could mean a trip to your local Walmart, Target, or Costco, or – if you're one of the millions of people who prefers a more immersive experience – a Best Buy  (BBY) . 

In most cases, Best Buy stores offer the widest variety of media, appliances, and electronics. You can pick up almost everything for your home there, including the latest Google and Apple cell phone, wall ovens, dishwashers, electric scooters, televisions, cameras, vacuums, home security systems, mattresses, and fitness trackers. There's even a tab on its website called "Yes, Best Buy Sells That," where some of the more curious customers can stumble into and find that, yes, Best Buy actually does have the kitty litter robot they've been looking for. 

Best Buy beats expectations but closes stores

Stocking all this inventory can be expensive, though, and Best Buy operates over 1,000 stores in the U.S. alone. All these expensive electronic goods, many of which are quickly outdated thanks to the rapid innovative pace and trends of technology, are liabilities until purchased, and moving merchandise on a consistent basis can prove difficult. 

The retailer reported bumper earnings following a successful 2023 holiday shopping season, however. It brought in $14.65 billion in revenue in Q4 – beating analysts' expectations by 0.58%. But the road to getting there was a little rocky. The retailer closed 24 stores in fiscal year 2024 (which roughly corresponds to the 2023 calendar year). 

And it plans to continue shuttering some under performers. 

"As our ongoing practice, we will continue to close existing traditional stores during our rigorous review of stores as their leases come up for renewal," CFO Matt Bilunas said on the earnings call, adding, "And in fiscal '25, we expect to close 10 to 15 stores."

Best Buy refocuses on newer store concepts

And for the stores remaining open, Best Buy is pulling some key items from its shelves as it puts more energy into higher-margin goods. 

CEO Corie Barry told analysts on the call that the retailer would be scrapping sales of its DVDs and other physical media products in order update its tech centers and make room for more profitable tech.

"We're not remodeling every store in the fleet," Barry explained, "But what we are doing is taking...a stronger position than we ever have to ensure that the shopping experience reflects that kind of excitement and that sparkle that technology brings to life."

Barry said that means removing outdated technology that no longer contributes to its bottom line as heavily. 

"And so, removing physical media, updating mobile, digital imaging, computing, tablets, and smart home, I think that allows us to make that center of the store really feel a bit more vibrant and exciting. And so, the goal here is not that every single store is going to look like an Experience Store," she said. 

That also means being more agile in previously untapped markets, and making room for reimagined store concepts. Best Buy has been rethinking its large store concepts, which function more as exhibitive warehouses than profit-making machines. 

"We are planning to open a few additional outlet centers and new formats to continue to test two important concepts," Barry explained. "First, we will open small locations in a couple outstate markets where we have no prior physical presence and our omnichannel sales penetration is low to measure our ability to capture untapped share. Second, we will test our ability to close a large-format store and open a small-format store nearby, thereby maximizing physical store retention through convenience."

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