Amazon shuttering its physical bookstores and four-star shops

The Seattle-based company said Wednesday that the move, which affects 66 stores in the US and two in the United Kingdom, will enable it to concentrate its efforts on Amazon Fresh, Whole Foods Market, its convenience concept called Amazon Go and its upcoming Amazon Style stores. Amazon Style, which will sell fashion and accessories, is set to open in a Southern California mall later this year.

“We remain committed to building great, long-term physical retail experiences and technologies and we’re working closely with our affected employees to help them find new roles within Amazon,” the company said in a statement.

It couldn’t be learned immediately how many Amazon workers are being affected.

Amazon opened its first brick-and-mortar bookstore in 2015, two decades after it began selling books online and helped drive a number of shops out of business. Amazon’s 4-star shops, which first made their debut in 2018, carry a limited selection of best-selling products from top categories that Amazon.com sells, including devices, consumer electronics, toys and games.

The move comes as Amazon.com Inc.’s overall revenue growth is slowing, and it’s looking for new ways to reignite sales.

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Neil Saunders, managing director of GlobalData Retail, said the strategy comes as a surprise. He said he believes it’s an acknowledgement that the bookstores weren’t delivering the returns Amazon was looking for.

Saunders said he thinks the main problem with Amazon’s non-food stores is that they lacked a real purpose even though the merchandise was well-presented.

“They were designed for people to pop in and browse rather than as destinations where people would head on a mission to buy something,” he wrote in a note on Wednesday. He noted that ultimately that wasn’t good for driving customer traffic, especially in an era where people are visiting shops less.

Saunders added that the other problem is the assortment which, in many locations, was disjoined and unfocused.

The news of the closure was first reported by Reuters.