BY HEATHER STANLEY
After thousands of job losses this year, more will be added to the total with the closure of Future Shop.
The March 28 announcement was a shock to both customers and workers. The 500 full-time and 1,000 part-time employees will now join the 17,600 left unemployed by the withdrawal of Target from the Canadian market.
Future Shop’s website said the sudden closure is due to the Canadian-based company and U.S. company Best Buy merging into one brand under the Best Buy name. Future Shop is a Canadian company that was purchased by Best Buy in 2001.
All 131 stores across Canada closed, 66 of them forever. The other 65 were set to reopen starting on April 4 as Best Buys.
Out of the stores in Waterloo Region, only the store on King Street and Northfield Drive will turn into a Best Buy.
In total, there will be 192 Best Buy locations in Canada, including 57 mobile stores. According to a Best Buy press release, “existing product orders, service appointments and warranties will continued to be honoured.” As well, Future Shop gift cards can be used at Best Buy locations and returns and exchanges will also be accepted.
Although many did not see it coming, Future Shop had been struggling financially for quite a while. Many people are now shopping online and through discounters such as Walmart, which creates tough competition. Two years ago, eight locations closed due to this adapting market.
Best Buy also said they “reviewed its real estate footprint to address the fact that a significant number of its Future Shop and Best Buy stores are located adjacent to each other, often in the same parking lot.”
This created a bunch of problems for both retailers.
Although Future Shop is owned by Best Buy, with the two stores being so close to each other, profit margins were lower for both companies. If locations were more spread apart, revenue would have been more plentiful. As well, both stores sold the same electronic products around the same prices, so there wasn’t much that set one store apart from the other.
Best Buy should have considered the impacts regarding the placement of stores being in such close proximity to each other when locations were being built. This would have eliminated the need to close so many stores. At the very least, more locations could have been converted into Best Buys.
Although the loss of jobs is inevitable, workers at transitioning Future Shop locations should have been given Best Buy jobs. This way, new locations would have a quicker start-up with knowledgeable employees.
Best Buy said in a March 28 press release that they will be investing $200 million in launching major home appliances in all stores, increasing staff and improving the online experience.
It went on to say that although the company is closing, 80 per cent of customers will still be within a 15-minute drive of a Best Buy location.