Dozens of Future Shop stores have been closed across Canada, its parent company Best Buy Canada Ltd. announced Saturday – a move that shocked workers.
The company said it was shutting down 66 Future Shop stores effective immediately. Meanwhile, another 65 stores will be closed for a week while they are converted to Best Buy stores.
The sudden store closings took many employees and customers by surprise. This sign appeared at a Future Shop store in Toronto on Saturday morning. (CBC)
"Currently, 80 per cent of our customers are within a 15-minute drive to a store and this won't change," Best Buy president and CEO Ron Wilson said in a written release.
The company said approximately 500 full-time and 1,000 part-time positions will be eliminated as a result of the consolidation.
"Any decisions that impact our people are never taken lightly; our first priority is to support them through this change. I want to express my appreciation to the employees who are leaving, for their contributions to Best Buy Canada."
News of the consolidation came as a shock to employees across the country on Saturday morning. Some didn't know they were out of a job until they got to work.
"The company has been struggling for a long time," said retail analyst and CEO of CustomerLab Jim Danahy. "It's the idea that people would show up to work this morning with no notice from their employer to find the door locked. That's the surprise. It's a head scratcher."
Some employees were told that in order to work at the Future Shops that will re-open as Best Buy outlets, they would have to reapply.
"We were called into a meeting [at 7 a.m.]," said one man employed as a computer sales representative at a Future Shop in Quebec City. "They did offer you choices ... but it was the package deal I took, so that's it."
A woman at the store said, "I'm keeping my job. I'm a customer service rep."
Customers caught off guard
"This store is permanently closed," read signs posted for customers at affected stores. "We thank you for your support and look forward to serving you at your nearby Best buy store."
A group of Future Shop employees hug each other outside their Quebec City store after the receiving the news. (CBC)
The notice awaited Janet Boudreau as she arrived at a Future Shop in Dartmouth on Saturday to shop for something she couldn't find at Best Buy.
"They didn't have what I wanted so I came to Future Shop, and I guess I'm not getting it here either," she told CBC News.
"It's sad. I liked Future Shop better. The people were very accommodating and I always found what I wanted. I'm disappointed."
A similar notice awaited Cori Maedel when she arrived at a shuttered store in Vancouver. She says she and her husband had purchased a sound system and a television worth $5,000 but hadn't yet picked it up.
"I'm a business owner so I understand how things happen and I understand that if you're going to terminate, this is just part of the process," she said.
But Best Buy could have done more for its customers, Maedel said.
"As a consumer I just want to know that my stuff is OK. If I had a number to call — here's what you need to know to make sure everything's OK — then I'll give them the time they need to get settled, but the issue I have is that we didn't have any notice as a consumer."
A customer reacts upon arriving at a Future Shop on Saturday to find the store is permanently closed. (CBC)
Best Buy will honour Future Shop gift cards at any location across the country. Existing product orders, service appointments and warranties will continue to be honoured, and Future Shop purchases can be returned or exchanged at any Best Buy location.
"About the price, I saw no difference really, but for the service I preferred Future Shop," unlucky shopper Bernard Deschenes said, comparing the shuttered store where he had come to shop to Best Buy.
The first Future Shop store opened in Vancouver in 1982. By 1990, it had become the largest retailer of consumer electronics in the country.
In 2001, Future Shop was purchased by Best Buy for $580 million.
Electronics market once 'enormous'
An overlap of two brands under a single owner was only possible because the market for electronics was once very strong, until it softened in recent years, says retail analyst John Winter.
"If you think back five, 10, 15 years, all Canadians were changing from analog to digital in their television sets and everybody replaced their televisions," he said.
'They haven't had a killer product to sell since large-screen TVs.'- Elmer King, Roynat Equity
"That was an enormous market. We could support a vast number of stores, selling electronic items. At the moment, the market is not as strong."
Winter said Future Shop used to do $1,000 a square foot in sales, which was unheard of 10 years ago. But now it's time to cut and consolidate.
"They haven't had a killer product to sell since large-screen TVs," said Elmer King, managing director at Roynat Equity. "Discount merchandisers like Walmart and Costco are killing them."
Two years ago, Best Buy spoke of how it had to adapt to a "changing retail landscape" where online stores were winning a greater share of the electronics market as it closed eight Future Shop and seven Best Buy big box stores across the country.
In a statement announcing the latest move, the Burnaby, B.C.-based retailer said it reviewed all locations for both retailers and found some were so close, they shared the same parking lot.
See a timeline of the major events in Future Shop's history here.
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