T-Mobile closes 80% of corporate retail stores in more aggressive COVID-19 response

T-Mobile said it’s closed 80% of its company-owned retail stores across the country, taking a more aggressive approach than earlier this week to align with social distancing guidelines as the U.S. works to stem the spread of COVID-19.  

The move comes just one day after the operator temporarily closed all T-Mobile and Metro by T-Mobile retail stores, including dealers, located within indoor shopping malls.

The new store closures will last until at least March 31.

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T-Mobile has about 5,300 branded retail stores, but Jeff Moore, principal at Wave7 Research, told FierceWireless that the majority of those, about 60% are independent dealer-operated stores as opposed to T-Mobile corporate retail stores.

In its latest announcement the operator said closures apply to company-owned stores, so based on the Wave7 percentages, if 40% are company owned, T-Mobile seems to be closing roughly 1,700 T-Mobile retail stores.

Of T-Mobile’s 9,400 Metro by T-Mobile stores as of November, the vast majority are dealers, with fewer than 200 corporate-owned stores, according to Moore. T-Mobile retail stores located inside malls make up about less than 10% of its locations, he added.

Stores that remain open will do so on reduced hours, operating from 10 a.m. to 6 p.m. in most locations, according to T-Mobile, which noted stores not closed are located across the country and meant to be within a 30-minute drive for most customers in each market. T-Mobile said it is not requiring any employees to work in retail stores for the next two weeks and made its decision on store count based on employee and customer needs.  

T-Mobile also noted that it’s implementing an approach for hourly retail employees to maintain their target income this month during the initial closures.

T-Mobile President and COO Mike Sievert in an email to employees said, “These aren’t simple decisions, but they are the right ones. We’ve said it before – the service we provide to keep our customers connected is essential, particularly right now.  This is not a time to focus on tackling the competition. This is our time to focus on our community and do our part to stop COVID-19 from spreading.”

T-Mobile's customer care centers, which aren’t open to the general public, will remain open, but at reduced staffing levels and with increased distance between workstations. Care team employees will also continue to get paid if they’ve experienced symptoms, been exposed to anyone with coronavirus, or are at high risk.

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Wells Fargo analysts on Monday said that carrier store closures, and Apple’s decision to close all retail stores outside of greater China until March 27, could impact subscriber growth in Q1 and likely Q2, estimating that the majority of gross adds happen through retail channels. (Update: The iPhone-maker Tuesday appeared to leave the timeline for store closures open-ended, with a notice on its website and FAQ section saying retail stores "are closed until further notice.") 

Cliff Maldonado, principal at BayStreet Research, said historically the firm has seen approximately 10% of carrier activations come from carriers’ online stores, meaning the vast majority come from in-store purchases.

“We believe carriers prefer to have consumers come to their retail stores vs selling online so they can provide a better customer service experience and the opportunity to sell accessories, etc.,” Maldonado said in comments to FierceWireless.

While acknowledging at this point the ultimate impact would still be a guessing game, he said BayStreet thinks “it certainly seems reasonable that the second half of March sales could be down 75-80% compared to the second half of March last year.”

It will also be interesting to see how other carriers respond to stores closing and ultimately how much demand will wind up as delayed versus lost, Maldonado noted.  

Verizon said over the weekend also said it would close a number of retail stores across the country temporarily to expand its work-from-home policy and reduce hours. The carrier hasn’t yet provided details about the number of stores, duration of closures, or locations.

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