Hey there, time traveller!
This article was published 31/1/2013 (1304 days ago), so information in it may no longer be current.
Neil Roche saw the future, and it wasn’t necessarily a friend of Future Shop.
"The future is mobile and online. Big box stores can be quite wasteful," the 20-year-old Roche said, shortly after receiving a pink slip and severance pay from the Regent Avenue Future Shop that was closed on Thursday – part of Best Buy Canada’s decision to close 15 big-box stores across Canada.
"It sucks that my store was the one to close," Roche added. "But they’re taking care of us. It was a great place to work."
The move, which represents about 10 per cent of the retailer’s square footage in this country, will mean layoffs for an estimated 900 employees.
"The retail landscape continues to change and our success is dependent upon our ability to evolve along with it," Mike Pratt, president of Best Buy Canada told the Financial Post.
"By taking a proactive approach in transforming our operations now, I have no doubt we will be in the best position to continue innovating our store experience for consumers and grow into the next decade."
The company, which is closing stores in the British Columbia, Quebec, Manitoba, Alberta and Ontario markets, will open a substantial, but unspecified number of its smaller Future Shop web stores and new Best Buy Mobile locations over the next three years across the country.
"We believe strongly that the changes being introduced this year will enable us to optimize our retail footprint, expand into new markets and allow us to better serve our customers across the country," Pratt said.
The Future Shop store on Regent Avenue appears to be the only Winnipeg outlet affected by a wave of Future Shop/Best Buy store closures that took place early this morning in different parts of the country.
The managers of the other three Future Shop stores and the two Best Buy outlets in the city confirmed in interviews that it's business as usual today for them.
Several of them also confirmed the Future Shop outlet at 1570 Regent Ave. was the only one here affected by the store closures.
In Winnipeg, the move took both customers and employees off-guard.
"It’s sad," said Brittany, who didn’t want to give her last name. "It’s a changing industry, right. There’s online (shopping) and the Best Buy next door (at the Regent Avenue location, across from Kildonan Place mall)."
In fact, when Ryan Kuka arrived Thursday morning to buy a television for his grandmother, the Kenora native simply shrugged.
"I was just here yesterday buying something," he said. "Now they’re closed. Best Buy is right there, so they’ll get my money."
Best Buy owns Future Shop.
The move comes almost a year after the company’s embattled U.S. parent announced the closure of 50 outlets and a plan to open 100 smaller mobile stores with a greater emphasis on smartphones, tablets and e-readers.
The U.S. division has made some headway with its restructuring strategy and shares have been climbing this month as the company faces a buyout proposal from founder and former chairman Richard Schulze.
Best Buy Co. said recently that revenue fell 0.4 per cent to $12.8 billion in the nine weeks ended Jan. 5 and overall sales at outlets open for at least 14 months (known as same-store sales, an important retail performance metric), fell 1.4 per cent, compared with a 0.4 per cent drop in the same period of 2011. Nevertheless, earnings per share have dropped by 36 per cent over the last year, and its share price fell 49 per cent in 2012.
But the company said same-store sales fell 6.4 per cent internationally due to declines in Canada and China, while U.S. same-store sales were flat.
Mr. Schulze was forced to step down from his post as chairman last May after it was found that he had known about an affair between then-CEO Brian Dunn and a female employee — which led to Dunn’s firing last April — but had not disclosed it to the board. He said in August that he wanted to buy out Best Buy and take it private, and has until Feb. 28 to raise financing.
In the three months ended Nov. 23, Best Buy said same-store sales fell 5.2 per cent and that growth in Europe was "more than offset by declines in Canada and China," and pointed the finger at those two markets again when it announced an international same-store sales decline of 8.2 per cent in the second quarter. The U.S. parent, which does not break out Canadian sales, will announce fourth-quarter results on Feb. 28.
In Canada, Best Buy operates 79 stores under the Best Buy banner and 149 under the Future Shop banner, a Burnaby B.C. business acquired by the Richfield, Minn.-based big-box retailer in 2001. The Canadian company has an estimated workforce of 25,000. Laid-off employees will receive severance and have hiring priority at the new locations, the company said.
-- with files from Murray McNeill, The Financial Post