Amazon to shut its bookstores and other shops as its grocery chain expands

People walk past an Amazon Books retail store in New York
People walk past an Amazon Books retail store in New York City, U.S., February 14, 2019. REUTERS/Brendan McDermid

March 2 (Reuters) - Inc said on Wednesday it plans to close all 68 of its brick-and-mortar bookstores, pop-ups and shops carrying toys and home goods in the United States and United Kingdom, ending some of its longest-running retail experiments.

The news, which Reuters was first to report, marks a turning point for a company that began as an online bookseller and helped drive established rivals such as Borders to bankruptcy. Amazon said it would focus more on its grocery markets and a department store concept going forward.

After opening its first book shop in Seattle in 2015, Amazon has tried out an array of ideas in retail: convenience stores without cashiers, supermarkets, and a format called "4-star" in which it sells toys, household items and other goods with high customer ratings.

Amazon had aimed to reach shoppers in more places and bring its online touch into the real world. Its bookstores would pull from its vast data trove and showcase what people were reading, even the reviews they left on Amazon's website.

But the company's innovations were not enough to counter the march toward online shopping that Amazon itself had set off. Its "physical stores" revenue - a mere 3% of Amazon's $137 billion in sales last quarter, largely reflective of consumer spending at its Whole Foods subsidiary - has often failed to keep pace with growth in the retailer's other businesses.

Michael Pachter, an analyst at Wedbush Securities, said internet-savvy Amazon was right to forgo the niche market of brick-and-mortar book shoppers, as bad a match as electric car maker Tesla Inc (TSLA.O) opening gas stations.

Pachter said Andy Jassy, Amazon's new chief executive, likely made this call as he reviewed the retailer's myriad businesses since taking the top job in July. "Retail is hard, and they're discovering that," he said.

The company's vice president of physical retail, Cameron Janes, departed Amazon after 14 years in November, he said in a LinkedIn post. Now chief commercial officer at retailer REI, he did not immediately return a request for comment.

Amazon will close its 4-star, pop-up and bookstore locations on various dates and notify customers via signage. Workers will receive severance or can receive help finding jobs at any company stores nearby, such as more than a dozen Amazon Fresh grocery locations it has announced, the retailer said.

Amazon declined to specify how many jobs would be cut.

Reporting by Jeffrey Dastin in Palo Alto, Calif. Editing by Richard Chang and Matthew Lewis

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Jeffrey Dastin is a correspondent for Reuters based in San Francisco, where he reports on the technology industry and artificial intelligence. He joined Reuters in 2014, originally writing about airlines and travel from the New York bureau. Dastin graduated from Yale University with a degree in history. He was part of a team that examined lobbying by around the world, for which he won a SOPA Award in 2022.