Best Buy eyes a different 'future' in Canada
Best Buy has announced that it is shutting down its Future Shop stores in Canada, consolidating under the Best Buy name and spending $200 million on its e-commerce capabilities.
Best Buy says it will convert 65 of the Future Shop locations into Best Buy stores within a week, and 66 others are closing immediately. Best Buy acquired Canada's Future Shop chain in 2001 for C$581 million.
“Currently, 80% of our customers are within a 15-minute drive to a store and this won’t change,” said Ron Wilson, president and COO of Best Buy Canada. “We will continue to have a strong store presence in all major markets in Canada.”
The move is centered on an ambitious plan that includes more staff in stores and a stronger focus on Internet sales, including orders that draw from in-store stock.
“Any decisions that impact our people are never taken lightly; our first priority is to support them through this change,” Wilson said. “I want to express my appreciation to the employees who are leaving, for their contributions to Best Buy Canada.”
The company will now have a total of 192 locations across Canada, including 136 large-format stores and 56 Best Buy Mobile stores. As a result of this consolidation, approximately 500 full-time and 1,000 part-time positions will be eliminated, the company said. The affected employees will receive severance, employee assistance and outplacement support.
The retailer said providing a seamless customer experience to all Future Shop and Best Buy customers is a key focus throughout this transition. All Future Shop gift cards will be accepted at any Best Buy Canada location and at BestBuy.ca. Existing product orders, service appointments and warranties will continue to be honoured and Future Shop purchases to be returned or exchanged will also be accepted at any Best Buy. For information on store changes and opening dates, customers are encouraged to visit our store locator. Customers with any questions can visit BestBuy.ca/questionsor call 1-866-BEST-BUY (1-866-237-8289). Customers who visit FutureShop.ca will be guided to BestBuy.ca.
Best Buy said investments of up to $200 million dollars will be made in Best Buy stores and BestBuy.ca, to build a leading omnichannel customer experience. This multi-faceted strategy will include:
launching major home appliances in all stores
working with vendor partners to bring their products to life in a more compelling way
increasing staffing levels to better serve our customers
investing in the online shopping experience, for example by expanding in-store pick-up areas for online customers and launching a ship-from-store program, making in-store inventory available to online customers across the country
The company said it expects its full year earnings to take a 10 cent to 20 cent hit from the temporary bump in operational expenses associated with the consolidation. In Best Buy’s most recent fiscal year, ended Jan. 31, the company earned $40.3 billion in revenue and had $3.53 in earnings per share.
In January, Target announced it was closing its 133 Canadian locations and cutting 17,600 jobs there, less than four years after Target first announced plans to expand into Canada.