Amazon to close 68 brick-and-mortar stores, swapping books for groceries and clothes
Topline
Amazon plans to close 68 brick-and-mortar stores, including two in the UK, its 24 bookstores and more than 30 “4-star” stores selling all-purpose goods, marking a shift towards groceries and fashion.
Customers shop at Amazon Books at the Time Warner Center in Manhattan on May 25, 2017.
TIMOTHY A. CLARY/AFP via Getty Images
Highlights
In a move first reported by Reuters on Wednesday, the retail giant plans to focus more on grocery stores, clothing stores and Amazon Go, a chain of stores allowing customers to buy goods without use checkout, said Amazon spokeswoman Betsy Harden. New York Times.
The change will not affect the company’s 38 Amazon Fresh grocery stores or the approximately 500 locations operated by Whole Foods Market, an Amazon subsidiary.
In 2018, a year after Amazon acquired Whole Foods and the year it opened its first Amazon Go store, the company reported that physical locations brought in around $17.2 billion, a sum that fell to $17.1 billion in 2021.
Later this year, Amazon hopes to open its first Amazon Style store in Glendale, California, where the company plans to allow customers to have clothes delivered directly to their fitting rooms using an app.
Amazon will help employees affected by store closures find new roles in the company, Harden told the New York Times.
Although the company announced in 2019 that it would close its Amazon Pop Up mall kiosks, nine remain open in seven states and the District of Columbia.
Key context
Amazon started in 1994 as an online bookstore, but has since branched out to sell everything from pharmaceuticals to cloud storage to auto parts, reaching a valuation of $1.55 trillion. However, the online giant has struggled to break into in-person shopping, with locations relying on digital in-store advertising to drive profit, Insider reported. In August, the the wall street journal, citing unnamed sources, reported that Amazon planned to open large stores similar to smaller versions of Bloomingdale’s or Nordstrom, possibly foreshadowing the Amazon Style project. Despite the closure of Amazon’s bookstores and 4-star stores, Harden said the company still holds a long-term commitment to brick-and-mortar retail.
Further reading
“5 reasons why Amazon Go is already the biggest retail innovation of the next 30 years” (Forbes)