Microsoft to close all of its retail stores and take $450m hit

Microsoft is set to close all of its physical retail stores across the globe as the coronavirus pandemic forces it to take a “new approach to retail”.

Microsoft announced in blogpost that it plans to pull the shutters on its global estate of more than 100 retail stores, leaving just four stores to be revamped into “Microsoft Experience Centres”.

This drastic closure plan is set to cost the tech giant $450 million this quarter in the form of a pretax asset impairment charge.

READ MORE: Microsoft “beat virtually every metric” in first quarter

Its newly opened flagship in London, alongside three other key stores in New York, Sydney and Redmond will be the only stores to reopen their doors after lockdown as Experience Centres.

These will focus on allowing customers to interact with Microsoft’s products before later purchasing them digitally.

According to the company, all of its retail staff will be given the opportunity to “continue to serve customers from Microsoft corporate facilities and remotely” and no redundancies will come as a result of the closures.

“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,” Microsoft said in a statement.

Its corporate vice president David Porter added: “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”.

Analysts at Wedbush suggested that while the pandemic has undoubtedly forced Microsoft’s hand, “physical stores generated negligible retail revenue” for the company and sales had been shifting online over the last few years anyway.

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