Sony's Restructuring Shouldn't Be A Surprise - Twice

Sony's Restructuring Shouldn't Be A Surprise

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SAN DIEGO — Sony Electronics’ restructuring announcement, which involves the closing of 20 of its stores in the U.S., should not have come as a surprise to those who where closely reading the company’s recent financial.

When Sony Corporation reported its fiscal third quarter financial early last month, which included a 23 percent sales gain and a net profit vs. a year-on-year loss, it also said that it would sell off its Vaio PC business, make its TV operations a separate subsidiary, and lay off about 5,000 by the end of fiscal year 2014.

Vaio PCs have been a big part of Sony Stores, and conjecture was rampant that Sony Store closings would soon follow.

Sony U.S. said in a statement last week that the restructuring is designed “to maintain its competitiveness in an evolving consumer electronics market” in the U.S. It confirmed a total staff reduction of one-third by the end of the calendar year, affecting approximately 1,000 employees across all sites.

The company clarified the decision by saying, “In addition, in an effort to further streamline costs and continue focus on existing partner relations, Sony announced the closure of 20 U.S. Sony Stores,” the company said.

Mike Fasulo, newly named president/COO of Sony Electronics and a longtime company veteran, said in a statement, “While these moves were extremely tough, they were absolutely necessary to position us in the best possible place for future growth. I am entirely confident in our ability to turn the business around, in achieving our preferred future, and continue building on our flawless commitment to customer loyalty through the complete entertainment experience only Sony can offer.”

Sony said in its statement it “continues to drive its industry leadership in premium products across all of CE,” with an emphasis on 4K products of all types, “bolstering 2K models in 2014,” for the “future success of its U.S. television business.”

Sony said its focus will be on “its premium products — including its digital imaging line, high-resolution audio and full suite of professional solutions — while leveraging its strengths in hardware, content and gaming.”

Twenty stores in the U.S. are closing: Tysons, Va.; University Village, Wash.; Galleria Dallas, Texas; Forum Shops, Nev.; Pentagon, Va.; Boca Raton, Fla.; Menlo Park, N.J.; Las Americas, Calif.; Camarillo, Calif.; Aurora, Ill.; Gilroy, Calif.; Central Valley, N.Y.; Wrentham, Mass.; Pleasant Prairie, Wis.; San Marcos, Texas; Cherry Creek, Colo.; Dolphin, Fla.; Century City, Calif.; Valley Fair, Calif.; and Comcast, Pa.

Eleven stores remain open, including its New York City flagship store and its SPE store at the Culver City, Calif., studios.

Sony operated 44 retail stores at the chain’s peak in 2008, excluding outlets, and was the 20th largest CE retailer in 2012, according to TWICE’s Top 100 rankings. Sales totaled $829 million, down 7 percent from the prior year, as the company began closing locations.

Sony did not provide further details on other organizational changes regarding this announcement.

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