Microsoft official announces permanent closure of physical retail stores Analyst: Tough but wise decision

Microsoft, the US Internet giant, said in a statement on its official website on Friday that it would permanently close its Microsoft Store physical retail stores, a move that it expects to incur a pre-tax charge of $450 million, mainly for asset write-offs and impairments, at $0.05 per share, and to be included in its current quarterly earnings.

Microsoft official announces permanent closure of physical retail stores Analyst: Tough but wise decision

David Porter, Microsoft’s vice president of corporate, says the company’s portfolio has largely evolved into digital products, online sales are growing and talented teams are serving customers around the world without geographical constraints. At present, Microsoft’s service team is available in 120 languages.

Microsoft said it will continue to invest in digital innovation in hardware and software as digital storefronts, including the electronics mall, and Xbox and Windows stores grow significantly. The new services include one-on-one video chat support, online tutorial videos, virtual workshops, and more digital solutions.

Since the end of March, microsoft has stopped all offline retail stores because of the virus epidemic, and since then the retail team has helped small businesses and customers make digital transformations. Microsoft’s offline retail store program was launched a decade ago to create a shopping experience similar to apple’s, and microsoft has even opened an offline store on New York City’s Fifth Avenue, just a few blocks from Apple’s flagship store.

In its official statement, Microsoft made no mention of possible job cuts, but also to plans to continue to serve customers at the Microsoft Experience Center in New York, London, Sydney and the company’s headquarters.

“This is a difficult but smart strategic decision,” Wedbush analyst Dan Ives said in a research note Friday. “