Microsoft to close 83 retail stores and take $450 mn hit

Microsoft is set to close its 83 retail stores and take a related pre-tax asset impairment charge of $450 million in the current quarter.
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The Redmond, Washington-based software giant said it will focus on its online store at Microsoft.com, where customers can go for support, sales, training and more.

Microsoft said all current retail employees would be given an opportunity to remain with the company in different roles.

“Speaking over 120 languages, their diversity reflects the many communities we serve,” Microsoft Corporate Vice President David Porter said of the company’s retail employees in a statement. “Our commitment to growing and developing careers from this talent pool is stronger than ever.”

The company also said it will rethink other spaces that serve all customers, including operating Microsoft Experience Centers in London, New York, Sydney, and Redmond campus locations.

The physical stores generated negligible retail revenue for Microsoft and everything was moving more and more towards the digital channels over the last few years,” Wedbush analyst Dan Ives said in a note.

Retailers, whose stores shuttered in mid-March due to coronavirus-prompted lockdowns, have seen a huge surge in online demand amid stay-at-home orders, Reuters reported.

Microsoft had expanded its retail presence in an effort to create a shopping experience similar to Apple’s, where people could go to try new Microsoft software and hardware created by both Microsoft and its partners. Microsoft built a store on 5th Avenue in New York City, just blocks away from Apple’s iconic glass cube store, CNBC reported.

“Microsoft will continue to invest in its digital storefronts on Microsoft.com, and stores in Xbox and Windows, reaching more than 1.2 billion people every month in 190 markets,” it said. “The company will also reimagine spaces that serve all customers, including operating Microsoft Experience Centers in London, NYC, Sydney, and Redmond campus locations.”

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