Best Buy officials announced on Thursday that they plan to close 50 of their big box stores and lay off 400 employees at corporate and support levels, according to a news release.
But those plans—at least for the time being–do not include Eagan's Best Buy store, located along Town Centre Drive near the Eagan Promenade shopping center, according to updated information released by the nationwide retailer.
Stores in Edina, Brooklyn Center, Rogers, Lakeville and Hutchinson will close, impacting more than 300 workers, according to Kare11. However, Best Buy also announced it plans to open 100 smaller and more profitable "Connected Stores".
The closures are part of $800 million in planned cost reductions by 2015. In the fourth quarter of 2011, the company reported a net loss of $1.7 billion—or $4.89 per share.
The news of closures and downed profits are not a surprise to many, as Best Buy reported shortfalls after its third quarter in 2011 as well. In January 2012, and also suggested it was getting closer and closer to bankruptcy every day.
In response to the losses, the company plans to increase its points of presence, while decreasing overall square footage by converting larger big box stores in the Twin Cities and San Antonio markets to the new "Connected Store" format.
Connected Stores are remodeled big box stores that focus on connections, services and multi-channel experience through a total transformation of both the store and the operating environment. The store remodels are expected to be completed before the 2012 holiday season.
The company expects total big box square footage in these combined test markets to be reduced by almost 20 percent through store downsizing and closures, while points of presence will increase by more than 20 percent.
"These changes will also help lower our overall cost structure," CEO of Best Buy Brian J. Dunn wrote in the release. "We intend to invest some of these cost savings into offering new and improved customer experiences and competitive prices—which will help drive revenue. And, over time, we expect some of the savings will fall to the bottom line."