Why Microsoft had to close its retail stores

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2020-06-30 18:46:10

If you paint stripes on a horse, it doesn’t become a zebra. And the same is for companies. As a company, you develop a corporate DNA, which becomes so ingrained that it is hard to fight against your genetic programming. I had pointed this out in an earlier piece. It can become an albatross, or in some cases, it gives a good lens to navigate into the future.

There is some talk on the Internet that with the retail sector going through convulsions, it made perfect sense for Microsoft to shut down its 83 retail locations — that too at a considerable cost.

Microsoft, at what almost any other company would call great expense, is closing its 83 retail stores, most of which are in the United States. It’ll cost Microsoft $450 million, or 5 cents per share in terms of earnings, to shutter the snazzy outlets. That Microsoft was willing to bite a half-a-billion-dollar bullet to rid itself of its stores speaks volumes to what money pits they were. (They closed during the pandemic.) The company “politely” declined to make executives available for an interview.

But it is more than cost savings or the COVID-19 related troubles in the retail sector. It is also more than this Apple-wannabe strategy. And you have to see it more than just one single event. For instance, a few days ago, Microsoft announced that it was shutting down Mixer, its gaming-focused streaming platform. In 2018, it bought GitHub.

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