Best Buy says goodbye to mobile phone stores

NEW YORK— Best Buy (BBY) is shuttering all 250 of its small-format mobile phone stores in the U.S., saying the locations have become less profitable.

A memo from the CEO to employees says the stores will close by the end of May and every effort will be made to retain the workers.

The nation's largest consumer electronics chain launched the stores more than a decade ago, before Apple's iPhone was launched. The mobile phone business was growing quickly, with high profit margins.

But it said the business has matured and running the mobile stand-alones cost more than its larger stores. It added that 85 percent of the stand-alones are within three miles of a big box store.

Best Buy says the stand-alone stores accounts for just over 1 percent of the company's total revenue.

Under the leadership of CEO Hubert Joly, a former hospitality executive, the company has cut costs and pushed to match or beat the prices of competitors like e-commerce giant Amazon. 

It has been adding new services such as Best Buy Smart Home, where in-store experts help customers select from products such as smart locks, lights and thermostats. The Richfield, Minnesota-based retailer also recently expanded its test of 24/7 tech support for any device a customer owns regardless of whether it was purchased at the chain.