U.S.-based electronics retail giant Best Buy Co. is closing its 131 Future Shop stores Saturday and will re-open 65 of them in a week under the Best Buy banner in a bid to bolster business.
The company said “a significant number” of its Future Shop and Best Buy stores are located near each other, often in the same parking lot.
After the closures, the company will have a total of 192 stores across the country, including 136 large ones under the Best Buy name and 56 smaller Best Buy Mobile stores.
Ron Wilson, president of Best Buy Canada, said 80 per cent of customers are within a 15 minute drive to a store and “this won’t change. We will continue to have a strong store presence in all major markets in Canada.”
As a result of the consolidation, about 500 full-time and 1,000 part-time jobs will be lost, the company said. The affected employees will receive severance and help with outplacement support, it said.
Best Buy expects to post restructuring charges and non-restructuring impairments of between $250-million and $350-million, or 41 cents a share (U.S.) to 58 cents a share, it said. This includes $175-million (Canadian) to $225-million of cash charges, mostly tied to future rent obligations and severance, that will be paid over the next five years.
The company said it expects diluted earnings per share to be negatively affected in fiscal 2016 in the range of 10 cents (U.S.) to 20 cents a share, primarily because of a temporary increase in operational expenses related to the consolidation and store disruptions. But it doesn’t expect the negative earnings impact to continue into future years, it said.
It said it will invest up to $200-million (Canadian) in Best Buy stores and its web site, while launching major home appliances in all stores and increasing staff levels.
“Any decisions that impact our people are never taken lightly,” Mr. Wilson said in a statement. “Our first priority is to support them through this change.”
