Here's Why Microsoft Shut Down Brick Stores Despite Strong Financial Result

Microsoft stores are being shut down as they struggle to compete against Apple. Microsoft will now invest more in its digital stores which the company said has recorded growth in sales. The online sales have been more impressive as COVID-19 measures affect physical store patronage.

Microsoft stated that four physical stores - London, New York, Sydney and Washington - will remain open but will be converted to experience centers as its retail operation will be moved online. The new decision will keep more than 80 Microsoft stores earlier closed due to COVID-19 on lockdown.

This new approach to retail will affect several employees of Microsoft in the brick stores, but while the number of affected workers was not revealed, the company disclosed that it would budget $450 million for the costs of shutting down its stores. This shows consumers are losing interest in physical stores as COVID-19 turn their sight to online.

Online Growth Forced Microsoft To Shut Brick Store

In a company statement, Microsoft stated, “Microsoft will continue to invest in its digital storefronts on Microsoft.com, and stores in Xbox and Windows,” Explaining further that its workers in Retail will “serve customers from Microsoft corporate facilities and remotely providing sales, training, and support,” the company said.

While justifying the migration to digital stores, Microsoft corporate Vice President David Porter, said, “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,”

Despite the impact of COVID-19 on its physical stores, Microsoft financials posted strong growth as net profit grew by 22 percent year-on-year to hit $10.8 billion from January to March, with a turnover of $35 billion.