Here’s good news for those of us that use Best Buy primarily as a place to do research for stuff we eventually buy online. The electronics retailer is looking to sublease a good chunk of its floor space to outside vendors, which means you’ll have an even wider variety of items to peruse before you end up purchasing somewhere else.
With its market share shrinking, Best Buy is hoping to cut the average size of its retail stores by about 20%, from 45K square feet to 36K square feet. But since it wouldn’t be prudent to just take a sawzall to the walls and floors, the company is hoping to get in on the growing trend of stores-within-stores by leasing out floor space to retailers like Trader Joe’s or Sephora.
“We can reduce our overall square footage while actually increasing our presence,” said Big Blue’s CEO at the company’s annual shareholders meeting this week. “It’s an opportunity to capture cost savings and get ourselves ‘right size.’”
From the L.A. Times:
“Big-box has already seen its heyday,” said Brad Thomas, a retail analyst with Keyblanc Capital Markets. “Retailers just don’t need as much space as they once did. Across the retail industry there is an effort to reduce the size of your stores as retail and purchases increasingly occur online rather than through brick-and-mortar stores.”
One big problem facing Best Buy, reports the Times, is that the chain generally leases its locations. Thus, any new tenants and construction would need to be approved by the landlords.
“It sounds great to say that you are going to cut costs by reducing your real estate,” a real estate consultant tells the paper. “but it’s very difficult to execute and it doesn’t happen overnight.”