This archive report was first published on 27 June 2020.
Microsoft has made the decision to permanently close all its retail stores, a move that reflects the company's growing focus on online retail. The decision was announced on June 26, 2020, and is part of a broader shift towards digital storefronts.
According to a statement from the company, the move is a response to the changing retail landscape, with Microsoft choosing to invest in its digital storefronts on Microsoft.com, as well as stores in Xbox and Windows. The company will retain four locations, which will be transformed into 'experience centers' in London, New York, Sydney, and at its Redmond, Washington headquarters.
Microsoft has set aside $450 million to cover the costs of closing the locations, but the number of employees who will be affected by the decision is not yet clear. The company's retail team members will continue to serve customers from Microsoft corporate facilities and remotely, providing sales, training, and support.
Microsoft's decision to close its retail stores is seen as a response to the growing popularity of online shopping, as well as the company's shift towards digital offerings. The company's corporate vice president, David Porter, stated that the company's sales have grown online as its product portfolio has evolved to largely digital offerings.
Independent technology analyst Neil Cybart has suggested that the closures may be due to the Surface business losing momentum in the consumer space. However, Microsoft's financial results have not yet reflected the impact of the pandemic, with the company posting a net profit of $10.8 billion from January to March, up 22 percent year-on-year, on a turnover of $35 billion.
