Best Buy Is Shrinking Stores; Adding Mobile Units

After suffering weaker sales, Best Buy is thinking small: It says it will focus on expanding its petite Best Buy Mobile stores, which are about 1,400 square feet, and shrink its regular stores by about 10% in the next three to five years.

In presentations to investors and analysts, the Minneapolis-based chain says it is all part of its mission to look beyond individual products to larger issues of connectivity. "Technology is connecting the world, and we believe it's changing the world for the better," says CEO Brian J. Dunn, in its release explaining the changes. "We recognize that people need help in navigating our increasingly connected world. And Best Buy has an unparalleled range of ways we can assist – online, through our stores, over the phone or in their homes. This multi-faceted approach allows us to serve customers whenever and wherever they want."

It's beefing up its mobile offerings, adding 150 Best Buy Mobile standalone stores in the fiscal year, and expects to have an estimated 600 to 800 stores within five years. The smaller mobile stores emphasize impartial advice, with 10 carriers and 14 manufacturers, as well as straightforward pricing and tech-savvy associates, and had revenue of about $2.5 billion in fiscal 2011. Currently, there are 1,099 store-within-a-store units, expanding to an additional 600 location, and 191 stand-alones, with about 325 scheduled to be completed by the end of the current fiscal year.

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