Future Shop

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Future Shop
Type Subsidiary
Industry Retail
Founded 1982
Headquarters Burnaby, British Columbia, Canada
Key people

Ron Wilson - President and Chief Operating Officer

Annalisa King - Senior Vice President and Chief Financial Officer

Charles Tobin - Senior Vice President
Products Electronics
Revenue Increase CAD $5.0 billion (2012)
Operating income Increase CAD $3.252 billion (2012)[citation needed]
Total assets Increase CAD $10.787 billion (2012)
Total equity Increase CAD $8.715 billion (2012)
Employees 113,100
Parent Best Buy Canada
Website www.futureshop.ca

Future Shop is Canada's largest consumer electronics retailer. Future Shop operated 139 stores across all of Canada's provinces in January 2013.

Future Shop was purchased for C$580 million by Best Buy on November 4, 2001. The company was renamed Best Buy Canada Ltd.—a wholly owned subsidiary of its American parent. It has continued to operate Future Shop as a separate division, with most locations under their original name. Future Shop continues to grow and open new stores across Canada. In December 2008, Future Shop opened its new flagship store in Edmonton at South Edmonton Common, which is the largest in Canada.[1]

History[edit]

Beginnings[edit]

Future Shop in Ottawa

Future Shop was founded in 1982 by Iranian entrepreneur Hassan Khosrowshahi, who left Iran to settle in Vancouver, British Columbia, to start a retail business.[2] Khosrowshahi graduated from the University of Tehran with a degree in law and economics and was a part of the family that owned the Minoo Industrial Group, a large Iran manufacturer of pharmaceuticals, cosmetics, and food products. Khosrowshahi planned to open a chain of consumer and home electronics stores and take over the Canadian retail market. His associate, Ardeshir Ziabakhsh (Ardy Zia), took the role of president and CEO of the newly formed company and Khosrowshahi served as chairman and founder. In 1983, Future Shop opened the first three stores, all of which were in British Columbia. The company sold computers, software, games, videocassettes, audio equipment, music, and other items. By December 1983, the first month all of the Future Shop stores were opened and making business, the company reached $2.8 million in sales.[2]

By 1993, Future Shop became the largest retailer of computers and consumer electronics in Canada and was operating 38 stores across the country and parts of the United States.[2] In August 1993, Future Shop went public on the Toronto Stock Exchange, making $30 million to be used for expansion and to pay off debt.

Future Shop store in Halifax

By the end of 1995, Future Shop's sales had reached more than $1 billion, with more than $38 million EBITDA (earnings before interest, taxes, depreciation and amortization)

In 1997, Future Shop announced a change in management, with Ziabakhsh leaving the company. Khosrowshahi took on the roles of president and CEO in addition to serving as chairman. Many people from company headquarters were let go during this transitional period.

In December 2011, Future Shop opened its first liquidation centre in Quebec, in Greenfield Park.[3]

At the end of March, Future Shop's Canadian division had produced record-setting sales and earnings for the company; however, the company's earnings were down 20 percent from the previous year, because of many losses caused by its failing U.S. operations. Despite plans for more locations in the U.S. over the next several years, the company instantly stopped any new plans for further expansion in the United States until the existing U.S. stores improved their performance in sales.

Focusing on Canadian markets[edit]

In 1998, Future Shop purchased the Canadian division of Computer City from CompUSA, three months after the Computer City chain had been merged into CompUSA and either converted to CompUSA or closed and liquidated. During the next year, two of the Computer City retail stores were liquidated because of poor sales. In addition, the competing Adventure Electronics in Ontario and Quebec closed, leaving Future Shop as the only big-box electronics retailer in Canada.

By the end of 1998, the U.S. locations of Future Shop were performing badly, with $53 million in losses over the last few years, and Future Shop projected another $30 million in losses would occur by the end of the next year. After major losses in sales, in March 1999, the company announced that it would close U.S. operations, holding liquidation sales and closing down in the summer.[4] The closures left Future Shop with 81 stores across Canada. Many of the former stores ended up converting to one of its major U.S. competitors, Best Buy.

A Future Shop store in Edmonton

In 2000, Future Shop owned 83 Future Shop stores and five Computer City stores. In June 2000, Future Shop announced plans to open flagship stores in downtown Vancouver, Toronto, and Montreal.

In February 2001, Future Shop announced that the company would close and liquidate the five remaining Computer City stores because of poor sales. At the same time, Future Shop also attempted to acquire Chapters, a chain of book stores in Canada, but failed to come up with a reasonable offer.[5]

Best Buy buyout[edit]

In March 2001, American-based Best Buy acquired Future Shop for $580 million Canadian. Future Shop was to be run as a separate division as "Best Buy Canada". The acquisition caused Khosrowshahi to step down as president. The other executives from Future Shop retained their positions within the company.

Best Buy Canada has continued to operate Future Shop as a separate division, with most locations under their original name. Future Shop stores are still being added, most recently in South Edmonton Common in Edmonton. The company has also begun renovating some of its stores to focus more on product specialty areas, to separate video games into their own department, and to create a central "hub" featuring employees specializing in connecting different devices together. The first such renovated Future Shop store opened in August 2008 at Park Royal Shopping Centre in West Vancouver, British Columbia.

The new style of Future Shop store in Moncton
2010 Chevrolet HHR ConnectPro from a Montreal Future Shop store.

In many cases across the country, such as Lansdowne Centre in Richmond, British Columbia; Heartland Town Centre in Mississauga, Ontario; Centre Laval, Laval, Quebec; Marché Central in Montreal; Promenades Saint-Bruno, Saint-Bruno-de-Montarville, Quebec; Merivale Road in Ottawa; Sherway Gardens and the Toronto Eaton Centre areas in Toronto; in St. John's, Newfoundland and Labrador; and Northland Village Mall in Calgary; either the existing Future Shop location is in the same shopping centre as the more-recently opened Best Buy location or the two stores open in tandem in close proximity. The former Future Shop store in Montreal inside Carrefour Angrignon had been converted to Best Buy in 2005, even though Future Shop moved nearby outside the mall before that.

Downsizing[edit]

On January 31, 2013 Best Buy announced the closure of 15 stores in Canada with 7 Best Buy and 8 Future Shop locations. The closures were immediate and leaving Future Shop with 139 stores.[6]

The following stores were affected:

  • West Kelowna, British Columbia
  • Montreal - Forum Entertainment Centre (this store unionized the prior year[7])
  • Laval, Quebec - First Pro Ste-Dorothee
  • Sherbrooke, Quebec
  • Winnipeg, Manitoba - Regent Ave.
  • Calgary, Alberta - Macleod Trail
  • Ancaster, Ontario
  • Barrie South, Ontario
  • Mississauga, Ontario - Erin Mills[8]
  • Victoria, British Columbia
  • Nanaimo, British Columbia
  • Queensborough, British Columbia

The Newmarket, Ontario location was also closed November 2013.

The Markham Rd 14th ave Markham, Ontario location was also closed January 2014.

The Eglinton & Laird Toronto, Ontario location was also closed January 2014.

On January 30, 2014, 950 full-time BestBuy and Future Shop workers were laid off in an attempt to restructure layers of management and better provide service to the growing online market that Amazon operates in. Ron Wilson, president and CEO of BestBuy Canada, noted that online sales have grown over 50% over 2013.[9] Despite the restructuring and lay-offs, Future Shop and BestBuy's most prominent issue is that customers will "show case" the products, and then go home and buy them on Amazon for cheaper.

Entrepreneur and Tech Investor Marc Andreessen predicts that online shopping is the future and that big box retailers will suffer from the change in retail experience. Doug Steven on the other hand believes that retail exists for a different reason than only acquiring goods. Doug believes customers still want to "show case" products for a reason, which is to see how it works and make sure they are getting the correct item. Those are things you cannot directly do with online retailers. Doug believes that BestBuy and Future Shop need to revolutionize the customer experience when clients walk into the store, and this massive lay off will not be the answer the corporation is looking for.[10]

Classes of employees[edit]

Future Shop employees are separated into several classes. The commission-compensated sales force consists of "Sales Consultants" who provide advice about product and warranty coverage. Non-commissioned salespeople (such as those in the Entertainment department) are referred to as "Sales Associates". Customer service representatives dealing with returns, exchanges, and customer inquiries are referred to as "Customer Service Specialists", whereas the representatives dealing with terminal transactions at cashiers and purchase verification are known as "Customer Service Representatives". The operations and warehousing staff are called "Merchandisers", the home-theater and car audio installation team are the "Installers", and the computer troubleshooting team are the "Technicians". In 2007 all "Sales Associates" were changed back into "Product Experts", to keep the brand distinction between Best Buy and Future Shop. In 2008, all home theater installers, car installers, and computer technicians, were rebranded as "ConnectPro Experts" in order to have a more marketable name for computer/home theatre/car services.[11]

Social initiatives[edit]

Future Shop created a program known as the Future Generation Tech Lab Grant program. This program grants Canadian schools with technology that is used in the classroom. The program is aimed at reducing the "economic and digital divide for youth".[12] Future Shop has stated that the Tech Lab Grant program is designed to assist youth gain more at school and as a result students will be better prepared for the workforce.[12]

Going green and recycling[edit]

The Future Generation Green initiative is designed to keep landfills free of electronics. Future Shop recycles several electronic items in store. Customers residing in Alberta, British Columbia, Manitoba, Ontario, and Quebec are limited to recycling two items a day. Grande Prairie, Alberta is not a part of the Alberta recycling initiative.[13] In store energy management systems ensure heat and lighting is controlled. By using these systems the amount of energy saved can power 1300 homes for a year.[14] Future shop has chosen to use epost to electronically deliver pay stubs to save paper and trees.[14]

Expansion by smaller retail stores[edit]

Future Shop is beginning to open "boutique-like" stores. These stores are 5,000 square feet while a normally sized store is 27,000 square feet. The goal of the smaller store is to create a "bridge" between the bricks and mortar store and online store.[15]

Major product categories[edit]

Other services[edit]

Future Shop offers services and plans on a large selection of electronic.

  • Total Protection Plan on tablets and laptops
  • Product Service Plan
  • Product Replacement Plan
  • Product Exchange Plan

References[edit]

  1. ^ "Future Shop Boxing Day Shopping Outcome and Trends". Newswire.ca. Retrieved 2012-01-10. 
  2. ^ a b c "Future Shop Ltd. Company History". Fundinguniverse.com. Retrieved 2012-01-10. 
  3. ^ "Future Shop opens its first-ever Liquidation Centre in Longueuil, QC". Futureshop.ca. 2011-12-12. Retrieved 2012-04-25. 
  4. ^ Harrington, Mark (1999-03-09). "Future Shop to Close U.S. Stores". Crn.com. Retrieved 2012-01-10. 
  5. ^ "Timeline for Chapters". Allbusiness.com. Retrieved 2012-01-10. 
  6. ^ http://www.ctvnews.ca/business/best-buy-closing-15-stores-slashing-staff-in-canada-1.1137420
  7. ^ http://www.ufcw.ca/index.php?option=com_content&view=article&id=2661%3Afuture-shop-workers-make-history-in-quebec&catid=6%3Adirections-newsletter&Itemid=6&lang=en
  8. ^ http://www.cbc.ca/news/business/story/2013/01/31/business-best-buy-closure.html
  9. ^ http://www.torontosun.com/2014/01/30/best-buy-future-shop-to-layoff-950-employees
  10. ^ http://www.retailprophet.com/blog/the-future-of-retail/
  11. ^ "Future Shop Launches New ConnectPro Installation Services". Cnw.ca. Retrieved 2012-01-10. 
  12. ^ a b http://www.futureshop.ca/en-ca/futuregeneration/successes.aspx
  13. ^ http://www.futureshop.ca/en-ca/futuregeneration/recycle.aspx
  14. ^ a b http://www.futureshop.ca/en-ca/futuregeneration/what.aspx
  15. ^ http://blogs.vancouversun.com/2012/10/30/honey-i-shrunk-the-store-future-shop-expands-retail-reach-with-downsized-versions-of-its-traditional-stores/

External links[edit]