Some of Best Buy's Samsung mini-shops are closing, others expanding

The Samsung Experience Shops inside of Best Buy stores were the first of a new crop of mini-shops that have carved out large chunks of space in the electronics chain's stores.

Three years later, some changes are in the works. About 160 of the stores-within-a-store that display Samsung smartphones, tablets and wearable tech are closing, while about 250 are being expanded. In total, the adjustments affect roughly a third of the 1,400 mini-shops.

An undisclosed number of Samsung employees who staffed the shops that are closing will lose their jobs.

Best Buy officials emphasized that overall, the Richfield-based electronics retailer's partnership with Samsung, one of its biggest vendors, is growing.

"We're always moving stuff around in our stores to make a better store experience, and this is part of that work," said Carly Charlson, a Best Buy spokeswoman. "We have a great relationship with Samsung."

Neither Best Buy nor Samsung provided further details about the expansion. Samsung said in a statement that its partnership with Best Buy is "stronger than ever" and noted that the mini-shops offer the broadest selection of Samsung mobile devices in one location.

"We are always evaluating the Samsung Experience Shop to optimize the experience and with Best Buy, we are simply reallocating some of our resources," the company said in a statement.

The mini-shops have become a cornerstone of Best Buy CEO Hubert Joly's turnaround as he has sought ways to strengthen the company's ties to its key vendors. The retailer had already had Apple departments in its stores for years.

One of Joly's first major moves after he joined the company in 2012 was to broker the deal with Samsung to open the experience shops. It was seen as a win for both parties — offering Samsung a heightened physical presence in the United States without having to open its own stores and providing Best Buy a way to differentiate its store experience and to make it more of a destination for higher-margin products.

"This collaboration with key vendors is one of the ways we showcase for our customers the latest and greatest technology in a tangible fashion," Joly wrote in a letter to shareholders earlier this year.

In the mini-shops, vendors typically pay for the store fixtures and displays and often help pay for the employees who staff that part of the store.

The Samsung Experience Shops opened in 2013 and were the only store-within-a-store concept that rolled out to all of Best Buy's stores. Most other mini-shops are scattered in select stores.

The Samsung collaboration was followed by a similar partnership with Microsoft, which now has 814 shops, and Sony, which has dedicated home theater space in about 380 Best Buy stores.

Meanwhile, Samsung has rolled out two more mini-shop concepts inside of Best Buy — about 630 store-within-a-stores to highlight its 4K TVs as well as another 225 to showcase its appliances.

This year, Best Buy continues to add more to its roster, including more than 200 AT&T and Verizon mobile shops as well as about 375 LG shops in home theater.

Meanwhile, Samsung has recently been riding a strong wave of sales of its flagship Galaxy S7 smartphone after a tough couple of years duking it out with Apple's iPhone. It's the reverse of Apple, which has been struggling recently amid lower smartphone sales. Best Buy's business, in turn, is closely linked to the fortunes of those two companies. Its sales have been slipping so far this year.

While Samsung still doesn't have any of its own retail stores in the United States, it did open a 55,000-square-foot "living lab and digital playground" called Samsung 837 in the heart of Manhattan's trendy Meatpacking District in February. Consumers can't buy any products there. Instead, it's a place to explore technology through various installations and workshops.

Kavita Kumar • 612-673-4113