Macy's to open Best Buy shops inside stores

CINCINNATI — After a month of market volatility and an announcement it will close dozens of underperforming stores, Macy’s will soon open Best Buy shops within some of its department stores as a way to test selling consumer electronics.

The companies announced the arrangement earlier this week, which will begin in 10 Macy’s stores across the country in November. The 10 locations weren’t identified.

The 300-square-foot space will be staffed by Best Buy employees and featureSamsung smartphones, tablets and smart watches, as well as audio devices and accessories from Samsung and other brands.

Macy’s Inc. President Jeff Gennette said that the companies will test the stores through the holidays and into 2016 before deciding on the next steps.

“We are delighted that consumer electronics will be returning to selected Macy’s stores … Our customers have expressed interest in electronics for self-purchase and gift-giving,” Gennette said in a news release.

The association with Best Buy was announced on Tuesday, the same day Macy's said it will close 35 to 40 underperforming stores, around 5% of its total locations.

Best Buy, the nation’s largest consumer electronics chain, has been able to successfully navigate a tough consumer electronics market as it wrestles with price pressures and increased competition from online stores, notably Amazon.com.

In August, it posted fiscal second-quarter results that handily beat analysts' estimates as shoppers picked up major appliances, large screen televisions and mobile phones.

Best Buy's results are benefiting from an overall shift in consumer spending toward big-ticket items in the home amid improving home values. Business is also being helped by an explosion of new gadgets such as Apple watch, which will be rolled out to all of Best Buy's big-box stores by the end of September. The trend in spending for the home is also playing into the hands of home improvement players such as Home Depot.

Macy's stock has been hit hard after a month of market volatility, with shares down a bruising 20% from the all-time high it hit in mid-July. The tumble snaps an almost seven-year winning streak as the retailer deftly navigated the Great Recession and its lingering aftermath that dragged down so many competitors.