Microsoft announces 'new approach to retail' -- closing all of its physical stores

Gold Microsoft sign

The coronavirus pandemic has hit many traditional companies hard, and when things finally get back to normal -- whatever the new normal will look like -- we may be without various big name firms.

Microsoft, like Apple, has had physical retail stores for years, albeit on a smaller, less successful scale. If you want to try a product first hand, you can visit one of these locations, try the hardware out, and buy and leave with it, if you’re happy with your experience. But that’s all about to change as Microsoft is closing its physical retail stores globally, and focusing instead on online sales.

It is pulling the plug on nearly all of its retail stores, with the exception of four flagship sites in New York, London, Sydney, and Redmond, Washington, transforming these last stores standing into what it’s calling "Experience Centers".

The software giant will now focus on selling its products solely through the web.

"Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location," claims Microsoft Corporate Vice President David Porter. "We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations."

The move will result in a pre-tax charge of approximately $450 million, which the company says it will record in its current fiscal quarter that ends June 30.

"It is a new day for how Microsoft Store team members will serve all customers," continues Porter. "We are energized about the opportunity to innovate in how we engage with all customers, maximize our talent for greatest impact, and most importantly help our valued customers achieve more."

Image credit: Cineberg / Shutterstock

25 Responses to Microsoft announces 'new approach to retail' -- closing all of its physical stores

  1. ghammer says:

    $450 million? To close stores???

    • ɥʇᴉǝpɹO says:

      and they determined that amount is cheaper than keeping them open.

    • TechFan says:

      Man....that is roughly 90 million Xbox Series X gaming consoles they could just have giving away.

      • $450 million / $450 = 1 million.

        Google does math. Even when you write it out in words. Give it a try.

      • TechFan says:

        LOL - Yep.... Too funny. You are right.
        What is sad, it just goes to show how little half a billion is. This is more like MS can knock off 50-100 bucks, but only for the first 10 million units.

      • I remember Senator Dirksen, a long time ago, being mis-quoted as saying "A billion here, a billion there, pretty soon, you're talking real money." It does seem like a billion dollars doesn't mean an awful lot anymore, especially to companies with a market cap of over a trillion dollars. Still, Microsoft has wasted a lot with ill-conceived business ventures over the years.

    • raveda2 says:

      Well, they're closing ~112 stores... most if not all likely with long-term lease deals MS will have to pay to get out of. There are the costs of physically dismantling all those stores and shuffling the inventory around. Plus the myriad miscellaneous taxes, fees and expenses associated with closing a multi-national business of this scale down.
      And then there are the employee separation costs. MS has said the employees would be reassigned to other locations. Either way, it won't be cheap.

      Obviously some stores will be more costly than others depending on size and/or location... but spread out over 112 stores an average estimated cost of $4M per store not outlandish.

      • anchovylover says:

        "MS has said the employees would be reassigned"

        Yes, I saw that. It's a relief that jobs won't be lost at least so well done MS for that.

      • MistaReeMan32 says:

        Help save the employee jobs. Sign up for the FREE online training from the store site.

      • Myst Erio says:

        Your coal digging "job" is still safe, I reckon?

      • anchovylover says:

        You down voted my post showing relief that the MS Store workers will keep their employment with MS.

        What kind of person are you!

      • Myst Erio says:

        "What kind of person are you!"

        Why would I care?
        I reckon, I'm the kind of person that looks after Numero Uno.

      • anchovylover says:

        Why should you care?

        It's called having empathy for others suffering. It may not impact on you personally but you should be pleased for those employees and the families they support.

        You have exposed your true nature here and it's not pretty.

      • Myst Erio says:

        "It's called having empathy for others suffering."
        I reckon you're in need of your juice box, sweetie...

        "It may not impact on you personally but you should be pleased for those employees and the families they support."
        I reckon, they should find a better job.

        "You have exposed your true nature here and it's not pretty."
        I reckon, no one cares what YOU think...

    • YourBreastsAreHuge says:

      Yes and it's all tax deductible so Microsoft will ultimately pay $0.00.

    • MistaReeMan32 says:

      For a trillion dollar company its a big tax savings. These are long term leases, energy costs, etc. Ultimately its cooking the books for next quarters drop in profits now that WFH has settled down.

  2. async2013 says:

    How many jobs lost?

  3. sounder ✓ᵛᵉʳᶦᶠᶦᵉᵈ ᵃᶜᶜᵒᵘᶰᵗ says:

    Microsoft figured out Amazon secret.

  4. psycros says:

    This probably has more to do with stores being targets for thieving anarchist mobs than it does Coronavirus.

    • roborodent says:

      I doubt those stores ever turned a profit. They're right to just turn some of them into a showcase store.

    • Actually, as reported elsewhere, the plan had been to close them down starting next year. The Corona Virus lock-downs just moved the schedule ahead.

  5. neo wales says:

    Retail shopping is changing on a global scale, to be honest I'm surprised the MS shops were not closed down a few years ago. Apart from fresh food pretty much all my retail buys are now online, I just don't need to go to a shop unless its something very expensive and even then I'll often buy online. I didn't need to go to an MS shop to buy a Surface Pro 7, I configured and ordered online and it was at my door overnight.

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