Best Buy Canada has closed eight Future Shop stores and seven Best Buy locations in a sudden, unexpected move that will see 900 people lose their jobs, according to multiple news reports.
The chain appears to be the latest victim of "showrooming," the practice of consumers visiting a store to check out products and then buying them at a lower price online.
Market analysts blamed the phenomenon for Best Buy's announcement last fall of 2,400 layoffs in the U.S. Those layoffs followed a Q2 earnings report showing the company's profit plunging 90 per cent.
The National Post reports the cutbacks will amount to a 10 per cent reduction of Best Buy's floor space in Canada. The company intends to focus on developing smaller stores, and plans to open an unspecified number of smaller Future Shop locations and Best Buy Mobile outlets.
“We believe strongly that the changes being introduced this year will enable us to optimize our retail footprint, expand into new markets and allow us to better serve our customers across the country,” Best Buy Canada Mike Pratt told the Post.
The Canadian Press reports:
Best Buy Canada says it has closed eight Future Shop and seven Best Buy big box stores across the county.
The company says as part of its "transformational plan'' it will open Future Shop small concept web stores and Best Buy Mobile locations across Canada in the next year and a half.
It says the closures are part of its efforts to "reduce unnecessary costs, eliminate redundant operating systems and to optimize its real estate strategy to reflect ... a changing retail landscape.''
Best Buy Canada says it continues to operate more than 120 Best Buy and Best Buy Mobile locations along with over 140 Future Shop stores across the country.
In Quebec, the windows at the Sherbrooke outlet were covered in paper and a sign there announces the closure of that location.
Employees arrived for their shift Thursday morning and were met by security guards and closed doors. They did not receive advance notice of a closure.