Software giant Microsoft (NASDAQ:MSFT) is taking a "new approach to retail." The company is closing all of its physical Microsoft Store locations, except for four remaining locations, for good, focusing its retail efforts on e-commerce storefronts.
It's the end of the Microsoft Store as we know it
Microsoft's 72 U.S. retail locations and 10 international stores are already closed due to COVID-19 mitigation efforts. The store closings will now be permanent, effective immediately. Microsoft will record a pre-tax charge of $450 million to account for the related asset write-offs and impairments. The expenses are going into the second quarter of 2020, which ends on June 30.
The online sales department will shoulder Microsoft's retail efforts, serving every market from consumers to enterprise customers. Staff from the retail stores is not being laid off. They were retrained during the COVID-19 closedown to serve in Microsoft's online retail services instead, using tools such as video chat and virtual workshops. The digital stores on Microsoft.com, Xbox, and Windows already reach "up to 1.2 billion monthly customers" in nearly 200 geographic markets.
Four locations will remain, converted into Microsoft Experience Centers that are more about hands-on demonstrations of Microsoft technologies than outright sales.
Microsoft's retail presence was already shrinking before the COVID-19 pandemic came along to speed up the process. The last store closings were originally intended for the end of 2020 or early 2021. The coronavirus pandemic only accelerated Microsoft's existing plan.
"We are energized about the opportunity to innovate in how we engage with all customers, maximize our talent for greatest impact, and most importantly help our valued customers achieve more," Microsoft Corporate Vice President David Porter said in a prepared statement.
Editors' Note: The headline of this article has been updated to reflect that all Microsoft retail store locations will close, with four evolving into Microsoft Experience Centers.