After just 17 months in operation, Amazon.com Inc. has made the decision to close its two physical clothing stores, signaling a pivot away from brick-and-mortar retail formats. The company, known for its domination of the e-commerce market, is focusing its efforts on expanding its grocery store offerings instead. The closure of the Amazon Style stores, located in Glendale, California, and Columbus, Ohio, is expected to be completed by November 9th.
In a statement to Bloomberg News, Amazon spokesperson Kristen Kish explained the reasoning behind the closures: "After careful consideration, we've decided to close our two Amazon Style physical retail stores and focus on our online fashion shopping experience, where we're offering new, exciting selection at great value and introducing innovative technology to meet the needs of every customer."
This move comes on the heels of other physical store closures initiated by Amazon in recent years. Last year, the company shut down most of its Amazon-branded physical stores, including bookstores, the Amazon 4-Star variety mart, and mall pop-up kiosks. These closures were part of a larger trend of product wind-downs and workforce reductions at the Seattle-based company.
Although Amazon discontinued many retail formats, it did proceed with the opening of its first Style location in May 2022. However, it seems that this experiment did not yield the desired results. The closures will impact the teams of corporate employees dedicated to the format, which employed several hundred people, according to a reliable source.
While physical retail is still significant to Amazon, the company intends to focus on its grocery store business and continue investing in its expansion. Tony Hoggett, a former Tesco Plc executive hired to oversee Amazon's physical retail stores, recently initiated efforts to redesign the company's Fresh-branded grocery stores and streamline its online grocery franchises. Kish confirmed that Amazon plans to open new supermarkets in the future.
Notably, Amazon's physical stores, primarily generated through its Whole Foods Market locations, recorded a 5.6% increase in revenue for the third quarter, amounting to $4.9 billion. The company's commitment to the grocery industry is evident as it seeks to adapt and dominate various retail sectors.
While the closure of the Amazon Style stores marks the end of another physical retail endeavor by the e-commerce giant, it underscores Amazon's determination to prioritize its online fashion shopping experience and the continued expansion of its grocery store business. As the company makes strategic shifts in its offerings, it remains to be seen how these moves will shape the future of Amazon's retail empire.