Microsoft to close retail stores permanently, take $450-million hit

Microsoft is closing all its retail stores and moving sales online keeping only four locations that will become

Microsoft today announced that it is permanently closing its physical stores worldwide. There are some exceptions, including flagships in urban hubs including London, New York City, Sydney and its own campus in Redmond, Washington, but the remainder of the locations are going away.

"We will continue to co-locate engineering, sales, support, envisioning centers, executive briefing centers and retail spaces for maximum impact for our customers and our company", Microsoft Store corporate vice president David Porter said in a statement.

Microsoft, like Apple, has had physical retail stores for years, albeit on a smaller, less successful scale. The charge includes mostly asset write-offs and impairments. But while the retail outlets let users try an increasing array of Surface models and test out Xbox games, they often suffered from a lower level of interest and foot traffic than nearby Apple stores.

With more people buying electronics online, offline retail stores have lost customer footfalls as well as revenue in the last few years.

With Microsoft shutting down these stores, it does likely mean that there will be layoffs. This decision seems to have been made after Microsoft chose to temporarily shut down its store in March due to the pandemic COVID-19. The company behind the ubiquitous Windows operating system announced this week that their 83 retail locations would close as part of a larger effort to shift focus to online sales. The stores have been shuttered since late March due to the COVID-19 pandemic.

While stores have been closed, workers hosted more than 14,000 online workshops and summer camps, the company said, and 3,000 school graduation ceremonies.

Microsoft's brick and mortar stores are becoming largely extinct as the company pivots even further into digital.

The closure of physical stores will result in a pre-tax charge of approximately US$450 million too. Every time you pass one of their stores, they are always jampacked - and likely the only thing keeping malls in business these days.

All employees will have the opportunity to remain with the company, Microsoft said.



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