Recently we wrote an article about Barnes & Nobles's (BKS) plans to close around one-third of its stores over the next decade, and wondered the question of whether or not it would even be around ten years from now. Following up on that discussion, let's look at four other retailers with similar plans and ask are these store closings going to help rejuvenate the company, or just prolong the inevitable collapse?
1. Best Buy: Best Buy (BBY) was once a trusted retailer for buying all of your electronics, but its business has been struggling for several years. Its big stores were once its biggest asset, but with the boom in internet commerce, the company seems to be maintaining large-scale showrooms where consumers can check out products before running home to buy the exact same thing online. Showrooming has been the biggest hurdle facing Best Buy, which saw its shares drop by 40% during 2012.
Chart courtesy stockcharts.com
Best Buy has been closing stores, but it is doubtful that more store closings will be enough to save the troubled retailer. Its online business has not been able to compete against the likes of Amazon (AMZN), and as its brick-and-mortar stores continue to post lower same-store sales . There is speculation that the company will be taken private, in order to put in a place a more aggressive turnaround program, but even this will most likely not be enough to save the company.