Best Buy closing 15 stores, slashing staff in Canada
Published Thursday, January 31, 2013 11:55AM EST
Last Updated Thursday, January 31, 2013 10:26PM EST
Best Buy Canada suddenly shut down several Best Buy and Future Shop stores across Canada Thursday – unexpectedly leaving hundreds of employees out of work.
The company says 15 locations across Canada are closing – seven Best Buy and eight Future Shop. The company says the closures are part of a “long-term transformational strategy to optimize the company’s retail footprint across the country.”
In all, about 900 employees will be affected by the closures.
The news appeared to catch many workers off-guard. CTV Montreal reports that employees showed up at work to discover the doors locked, and notices posted on windows saying the stores had been closed until further notice.
Two Future Shop employees told CTV Toronto that they had no forewarning and only found out Thursday morning they had been laid off.
Another worker at a location in Winnipeg said, “They walked us to our locker to grab our stuff and showed us the door.”
One Best Buy employee contacted CTV Montreal to say he, along with more than a dozen other employees, had been laid off from the LaSalle location last Friday.
One shopper took issue with the way the stores were closed. “I mean, close your business, but don’t just close it unexpectedly like this,” he said.
Best Buy Canada Ltd. operates 139 Future Shop stores and 58 Best Buy Canada stores across the country.
Future Shop was founded in Vancouver in 1982, and expanded into the U.S. In 1999, Best Buy bought all the U.S. Future Shop locations, and two years later picked up the Canadian operations as well. Best Buy continued to run both chains, in many cases with both outlets located in close proximity.
The company has been facing tough competition from online-only retailers and has been a victim of what is known as "showrooming," a practice in which shoppers browse in-store and then buy the products online at a lower price from competitors.
Best Buy announced last March that it was closing 50 stores in the U.S. This past holiday season the company posted mediocre holiday sales.
“It’s definitely understandable from a business perspective,” a Future Shop employee said of the closures. “We weren’t doing that well financially anyways as a store.”
Best Buy Canada says that over the next 36 months, it will move into the second phase of its renewal strategy and will open state-of-the-art new Future Shop Small-Concept web stores and new Best Buy Mobile locations across Canada, where and when appropriate.
“This move will enable the company to better serve its customers in both more locations and smaller markets across the country,” it said in a statement.
“Best Buy is still the dominant retailer in Canada for electronics but they are taking timely moves because they see the future, and the future dictates change,” retail expert David Gray told CTV News.
The company says that all employees affected by the store closures will receive severance support as well as access to employee assistance programs and career transition support.
“Hiring priority will also be offered to previous employees across the country affected by today’s announcement,” it said.
The layoffs could also be a way to prepare for the arrival of Target, according to CTV Toronto’s consumer reporter Pat Foran. The U.S. retailer will open 130 stores across Canada starting in March and plans to be competitive with its pricing strategy.
“I see Target coming to Canada as the next seminal event,” retail adviser Antony Karabus said.