Electronics retailer Best Buy Co. Inc. (NYSE: BBY) said Saturday that it is closing 66 of its Canadian Future Shop locations and eliminating approximately 500 full-time and 1,000 temporary jobs. An additional 65 Future Shop stores will be closed for a week as the company consolidates the stores under the Best Buy brand.
Best Buy Canada, a subsidiary of Best Buy, said that “a significant number of its Future Shop and Best Buy stores are located adjacent to each other, often in the same parking lot.” The subsidiary’s president said:
Currently, 80 per cent of our 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.
Revenue from the company’s international segment dropped 12.4% year-over-year in the fourth quarter to $1.51 billion, and same-store sales were down 4%. Best Buy completed the sale of its China business in February, leaving Canada as the company’s sole international market.
Best Buy said it expects to increase its capital spending in Canada by about $160 million of the next one to two years and to record restructuring charges and non-restructuring impairment charges of $200 million to $280 million. Earnings per share will take a hit in the range of $0.10 to $0.20 in fiscal year 2016.
Best Buy acquired Future Shop in 2001 for $580 million. Before that acquisition Future Shop had entertained a plan to enter the U.S. market and compete directly against Best Buy. At the time of the acquisition, Future Shop had 88 stores in Canada.
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