Goodbye Future Shop: 66 stores closing, others converting to Best Buy locations
Published Saturday, March 28, 2015 10:23AM EDT
Last Updated Saturday, March 28, 2015 5:30PM EDT
The Future Shop brand appears to be a thing of the past in Canada, as the technology retailer's parent company moves to rebrand many of its stores under the Best Buy tag.
Best Buy Co., Inc., which owns and operates Future Shop and its competitor, Best Buy, confirmed the shift on Saturday.
In a statement, the company said it would close 66 Future Shop locations "effective today," with another 65 stores transitioning to Best Buy locations after a week-long shutdown.
Best Buy Canada says the move will eliminate 500 full-time and 1,000 part-time jobs. "The affected employees will receive severance, employee assistance and outplacement support," Best Buy said.
Many Future Shop employees turned up for work on Saturday morning to discover that they were locked out.
Brandon Buchanan, who used to work in mobile audio section at a Toronto store, said that a lot of his former co-workers were shocked by the news.
"That happened kind of suddenly, because a lot of the people I still know work here -- apparently, they showed up this morning and it was just locked out," Buchanan told The Canadian Press.
"I had planned on maybe coming back and checking it out for a job again now that I'm back in the city but I guess that's not happening," he added.
Michelle Derue, who showed up at downtown Toronto store on Saturday to purchase headphones, felt bad for the workers who lost their jobs, and said that they should have been notified sooner.
"It's not a good thing for them, they've got families … you should get some sort of advanced warning when things like this happen because Future Shop is a big store, so they should've known this way before just today," Derue said.
The president and COO of Best Buy Canada, Ron Wilson, said in a statement Saturday that the decision to cut jobs was not 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."
Maureen Atkinson, a retail analyst with J.C. Williams Group, told The Canadian Press that the layoffs will put workers in a tough position as they will be competing in the retail job market alongside recently unemployed Target staff.
The American retail giant shuttered its Canadian stores in January, affecting more than 17,000 employees.
"I think it's not great if you work in retail," said Atkinson. There's a lot of retail people out on the street give the Target closures too, so I think it's going to be a challenge employment-wise," she added.
Many shoppers turned up at Future Shop locations Saturday to find them closed with "Coming Soon" signs posted in the windows advertising the partnership with Best Buy.
Ben McLeod was frustrated after taking a city bus to try to buy a TV from a downtown Edmonton Future Shop -- and seeing that the store wasn't set to re-open for a week.
"I spent $10 on a bus pass for no reason and end up coming here and finding the store is actually closed," said McLeod. "It's stupid they would do that and not tell anyone in advance."
The organization says it is reviewing its "real estate footprint" because Best Buy and Future Shop locations are often placed fairly close to one another, "often in the same parking lot."
"Currently, 80 per cent of our customers are within a 15-minute drive to a store and that won't change," Wilson said.
Best Buy says it will have 192 retail locations, including 56 Best Buy Mobile stores, after the restructuring is complete.
"It doesn’t surprise me, actually, because I know the same company owns both stores. So at some point I expected them to merge into one," Guy Mcloughlin, a Future Shop customer, told The Canadian Press.
Best Buy acquired Future Shop in 2001.
"I would always go to both stores anyway to comparison shop, because occasionally one would be cheaper than the other. I guess I lose that option now. But otherwise I'm just thankful we've got something like that still in Canada because if they went I don't know what would be left," Mcloughlin added.
Future Shop gift cards will be honoured at Best Buy's online store and at all retail locations, the company said. Future Shop product orders, warranties and service appointments will be transferred to Best Buy, and Best Buy stores will also accept Future Shop returns and exchanges.
As part of the restructuring, Best Buy Canada says it will invest "up to $200 million" into what it calls a "multi-channel customer experience" to beef up its online and in-store retail offerings. Among the expected changes will be a move to expand online sales so customers can order from stock at their local retail store and have it delivered to their front doors.
Marketing professor Robert Soroka, of Concordia University, says he's not surprised by Best Buy's move to scale back on "brick and mortar" stores and emphasize its online store.
"My feeling is this is just a natural progression," Soroka told CTV News Channel.
He says Best Buy is moving to strengthen its online store to compete with web retailers like Amazon. The company has also fallen victim to "showrooming," where people test out products in store but buy them for cheaper prices online.
The cost of the restructuring is expected to range from $250 million to $350 million over the next five years as Best Buy moves to rebrand some stores, sell off others, pay out severance packages and close out its rent agreements.
With files from The Canadian Press