Microsoft is closing its retail stores across the world and taking a $450M write-off

Laurent Giret

Microsoft, Surface, Windows, Xbox, Microsoft Store

Microsoft has just announced some major news for its retail stores across the world, which have been closed since March due to the covid-19 crisis. While the retail industry has been hit pretty hard by the ongoing pandemic, Microsoft has opted for the nuclear option and will close all of its physical stores, resulting in a $450M write-off for the company.

“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,” said Microsoft Corporate Vice President David Porter. “We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations.”

According to Microsoft, the company’s retail team had already transitioned to helping SMBs and education customers in their digital transformation since the beginning of the pandemic. These employees will now continue to provide sales, training, and support and work from Microsoft offices or remotely. No one is apparently being laid off, which is good news.

The other good news is that Microsoft will transform some of its flagship stores in Redmond, NYC, London, and Sydney into “Microsoft Experience Centers.” However, the bad news is what this transition is going to cost for Microsoft. “The closing of Microsoft Store physical locations will result in a pre-tax charge of approximately $450M, or $0.05 per share, to be recorded in the current quarter ending June 30, 2020. The charge includes primarily asset write-offs and impairments,” the company said today.

Even though Microsoft is one of the biggest companies in the world, it’s safe to say that Surface devices and Xbox consoles are not exactly flying off the shelves like Apple products. It’s probably good for the software giant to refocus on its digital storefronts, and the company said today that more than 1.2 billion people in 190 markets are visiting, the Windows 10 Microsoft Store and the Xbox Store every month.