Best Buy Consolidates Canadian Operations30 Mar, 2015 By: Erik Gruenwedel
Move leads to the closure of 66 Future Shop stores
Best Buy March 28 announced it is restructuring its Canadian operations, which includes rebranding and shuttering existing Future Shop stores.
As a result, Best Buy Canada is closing 66 Future Shop locations, while temporarily shuttering an additional 65 stores for a week as they are rebranded Best Buy stores. In addition, website FutureShop.ca will be forwarded to BestBuy.ca.
The permanent closures will result in the elimination of about 500 full-time and 1,000 part-time positions. The affected employees will receive severance, employee assistance and outplacement support.
“I want to express my appreciation to the employees who are leaving, for their contributions to Best Buy Canada,” Ron Wilson, president and COO of Best Buy Canada, said in a statement.
The restructuring differs from recent moves by Target and Redbox, which both announced ends to their Canadian operations. Last year, Best Buy said it was exiting the Chinese market.
Indeed, Best Buy plans to invest upwards of $200 million in Best Buy stores and BestBuy.ca, including expanding in-store pick-up areas for online customers and launching a ship-from-store program, and making in-store inventory available to online customers across the country.
Wilson said the closures would still ensure that 80% of Best Buy customers are within a 15-minute drive of a store.
“We will continue to have a strong store presence in all major markets in Canada,” Wilson said.
Wedbush Securities senior analyst Michael Pachter said Best Buy is making the best of a bad economic situation. He said the company will continue to face declining store traffic as more of its customers shift purchases to Internet competitors.
“While we expect online competitors to continue to capture traffic at the expense of brick-and-mortar stores and expect Best Buy to suffer from declining customer traffic over the course of the year, it may gain some market share from several environmental tailwinds. Among these are the recent RadioShack bankruptcy, continuing troubles at competitor Sears and newfound disposable consumer income as a result of lower gasoline prices,” Pachter wrote in a March 30 note.