Nokia to close U.S. flagship stores

A woman uses her mobile telephone as she passes a Nokia advert in London July 20, 2009. REUTERS/Luke MacGregor

HELSINKI (Reuters) - Nokia will close its two flagship stores in the United States, a market where the world’s top cell phone maker is struggling to gain ground.

Nokia said it would close the stores in New York and Chicago as part of its retail strategy revamp to better focus on co-operation with telecommunications operators and with retailers.

Improving the company’s position in the U.S. market has been a priority for Chief Executive Olli-Pekka Kallasvuo since he started to run Nokia in 2006.

Since then, however, the company’s U.S. market share has eroded to well below 10 percent. Globally, Nokia controls nearly 40 percent of the phone market.

Nokia is also closing one of its two stores in London and its Sao Paolo store. After opening a flagship store in Moscow in December 2005, the company opened 11 more stores.

“This confirms a turn in Nokia’s retail strategy. It has failed to replicate Apple’s success with this format of store,” said Ben Wood, director of research at British consultancy CCS. (Reporting by Tarmo Virki; Editing by Steve Orlofsky)