However, prematurely winding up its stores (all 83 of them), including its Microsoft Experience Centres in London, NYC, Sydney, and Redmond campus locations, is going to cost the firm approximately $450M, or $0.05 per share.
Microsoft's retail stores mimic the look and feel of Apple's iconic sales fronts, from the glass walls to the wood tables to the very design of the Surface hardware on display.
Microsoft's Westfield Sydney location will be turned into an "experience centre" - along with those in NY and London. "The physical stores generated negligible retail revenue for Microsoft and ultimately everything was moving more and more towards the digital channels over the last few years", Wedbush analyst Dan Ives said in a note.
Since the physical store closures, Microsoft has kept its retail store staff busy helping serve customers by remotely providing sales, training, and support.
The company will reportedly focus on digital retail, stating Microsoft.com and the Xbox and Windows storefronts reach "up to 1.2 billion monthly customers in 190 markets".
"This is a tough but smart strategic decision for (Chief Executive) Nadella & Co.to make at this point". Four large Microsoft Stores will remain open to show new Microsoft products to the public.
Microsoft to Close Its Retail Stores
Microsoft stock was trading at US$197.27 per share Friday afternoon, down US$3.07 or 1.53 percent.
An anonymous source told The Verge that the plan to shutter its stores was underway ahead of the COVID-19 pandemic, but the global impact of the virus "accelerated" the closures.
Microsoft distributes its retail packaged products primarily through independent, non-exclusive distributors, authorised replicators, resellers and retail outlets, and it distributes its devices through third-party retailers. Since then, the company said its retail team has hosted more than 14,000 online workshops and summer camps, training hundreds of thousands of enterprise and education customers on using remote work and learning software.
The closure of the physical stores will result in a pre-tax charge of almost $450 million (Dh1.7 billion), or $0.05 per share, in the current quarter ending on June 30, the company said.
"Our team has proven success serving customers beyond any physical location", he added.