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Microsoft To Permanently Close Retail Stores; Incur Charge In Q4

Microsoft Corp. (MSFT) said Friday it is making a strategic change in its retail operations, including permanently closing its Microsoft Store retail locations.

The software giant will continue to invest in its online storefronts on Microsoft.com, as well as stores in Xbox and Windows. The company's retail team members will serve customers from Microsoft corporate facilities and remotely provide sales, training, and support.

In addition, Microsoft said it will "reimagine spaces" that serve all customers, including operating Microsoft Experience Centers in London, New York City, Sydney, and Redmond campus locations.

The company noted that the closing of the Microsoft Store retail locations will result in a pre-tax charge of about $450 million, or $0.05 per share, to be recorded in the current fourth quarter ending June 30, 2020. The charge includes primarily asset write-offs and impairments.

"Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location," said Microsoft Corporate Vice President David Porter.

In late March, Microsoft decided to temporarily close its retail stores due to the COVID-19 pandemic. The company noted that following closure of its retail stores, its retail team has helped small businesses and education customers to digitally transform.

Microsoft's retail team has virtually trained hundreds of thousands of enterprise and education customers on remote work and learning software, and also helped customers with support calls. The team supported communities by hosting more than 14,000 online workshops and summer camps as well as over 3,000 virtual graduations.

Microsoft said it will continue to invest in digital innovation across software and hardware. New services include 1:1 video chat support, online tutorial videos, and virtual workshops.

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