E-commerce giant Amazon (NASDAQ:AMZN) is shuttering its two Amazon Style physical stores located in Glendale, California, and Columbus, Ohio, by November 9. The move comes as the company is reevaluating its physical store strategy and exiting unprofitable businesses while sharpening its focus on grocery.
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Amazon to Shut “Style” Stores
Amazon’s decision to shut down its two Amazon Style brick-and-mortar stores comes just 17 months after it opened its first outlet in Glendale in May 2022. Last year, the company closed several of its physical retail concepts, including bookstores, Amazon 4-star stores, and mall pop-kiosks, as part of its strategy to streamline business and cut costs.
In a statement, an Amazon spokesperson said that the company is closing its two Amazon Style stores to focus on enhancing its online fashion shopping experience. The spokesperson emphasized that physical retail remains important to the company and it is continuing to invest in its grocery stores business. Amazon’s grocery stores business includes Amazon Fresh stores, Whole Foods Market locations, Amazon Go, and third-party partnerships.
Amazon’s efforts to streamline its business, reduce its headcount, and increase its efficiency are helping it in boosting its profitability. The company’s third-quarter earnings per share (EPS) jumped to $0.94 from $0.28 in the prior-year quarter, driven by solid revenue growth and enhanced margins. The company’s operating margin expanded significantly to 7.8% in Q3 2023 from 2% in the prior-year quarter.
Is Amazon a Buy or Sell?
Wall Street is optimistic about Amazon’s e-commerce business, cloud computing Amazon Web Services (AWS) unit, and rapidly growing advertising revenues. This reflects in the Strong Buy consensus rating on AMZN stock based on 43 Buys against just one Hold rating. The average price target of $175.80 implies 27.3% upside potential. Shares have rallied over 64% year-to-date.
