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Microsoft to permanently close high street stores and move completely online

James Titcomb
A Microsoft store in Sydney - Bloomberg

Microsoft will permanently shut down its high-street stores, taking a $450m (£364m) hit as it reverses an attempt to ape Apple’s physical shops.

The company said that a handful of flagship locations, including its sole UK store in London, would remain open as“experience centres”, but that it would shift entirely to online sales.

Almost all of Microsoft’s 83 stores, which have been shut during the coronavirus pandemic, will be closed completely.

Microsoft embarked on a store opening spree a decade ago under former chief executive Steve Ballmer, who saw a physical retail network as a key part of a push into computer hardware as it sought to challenge Apple.

It opened scores of stores across the US and opened the first British location in Oxford Circus last year. On Friday it said the store, as well as sites in New York, Sydney and its headquarters near Seattle, would be turned into sites that show off its technology.

It said staff would be relocated to Microsoft offices to provide online customer support.

Microsoft has continued to release hardware such as Xbox game consoles, laptops and tablets under Satya Nadella, who replaced Mr Ballmer in 2014. 

However, the company’s attention has largely shifted to selling software and services to businesses, the vast majority of which are now digital sales.

One of Mr Nadella’s first major acts was gutting the Microsoft smartphone division created by buying Nokia’s mobile business in 2013, although the company last year announced plans to release a new phone running Google’s Android software.

“Our sales have grown online as our product portfolio has evolved to largely digital offerings,” David Porter, the head of Microsoft’s stores said. Microsoft said the $450m charge, from write-offs and impairments, would be recorded in upcoming quarterly results.