Microsoft said Friday it will close nearly all of its retail stores as part of a change of strategy driven by the company’s focus on digital sales.
“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,” David Porter, a Microsoft vice president, said in a company statement about the stores, which are in about 80 North American locations, including Seattle’s University Village and at Bellevue Square.
But at least one analyst says the closures are also a belated acknowledgment that the Redmond-based software giant never developed the brick-and-mortar success of rival Apple.
“It was really always a very poor imitation of Apple,” Neil Saunders, retail analyst and managing director at GlobalData, said of the Microsoft Store, which debuted in 2009.
Even before they temporarily closed in March due to the COVID-19 pandemic, Microsoft’s stores “just didn’t really become a big hit with the consumer.”
Microsoft declined to say when the closures would take effect, or if the stores simply would not reopen. The company also didn’t say whether the closures would mean layoffs for store staff.
In a statement, the company said its “retail team members will continue to serve customers from Microsoft corporate facilities and remotely providing sales, training, and support.”
Closing its retail stores will result in a pretax charge of about $450 million, the company said.
Physical retail stores of all sorts have been hit hard by the coronavirus pandemic, with many marginal retailers pushed to the brink and stronger companies emphasizing online sales.
With Microsoft’s products mostly delivered digitally, its stores primarily have served as a showpiece for its offerings and a place to advise individual customers.
But Saunders said Microsoft’s offerings never justified the cost of a physical setting in the way Apple’s had.
Where Apple’s large product lineup and emphasis on stylish, tactile design is ideally suited for the “physical experience” of a retail storefront, Saunders said, “I don’t think that rationale ever really existed in the same way for Microsoft. It’s a very different sort of model and offering.”
Microsoft said it 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.”
The company will “reimagine” stores in New York, London, Sydney, Australia and on its Redmond campus, which will be redesigned as “experience centers.”