Future Shop

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Future Shop
Subsidiary
Industry Retail
Founded 1982
Defunct March 28, 2015 (2015-03-28)
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)
Increase CAD $3.252 billion (2012)[citation needed]
Total assets Increase CAD $10.787 billion (2012)
Total equity Increase CAD $8.715 billion (2012)
Number of employees
113,100
Parent Best Buy
Website www.futureshop.ca

Future Shop was a Canadian electronics store chain. First established in 1982 by Hassan Khosrowshahi, by 1990, the chain had become the country's largest retailer of computer and consumer electronics. As of January 2013, the company operated 139 locations across Canada.

In November 2001, Future Shop was acquired by the American consumer electronics store chain Best Buy for $580 million. Although Best Buy would begin to establish Canadian locations under its own brand following the purchase, it continued to operate the Future Shop stores as a separate brand, even though many of the new locations were in close proximity to existing Future Shop stores.

On March 28, 2015, Best Buy announced the immediate closure of all Future Shop locations; 65 of the former locations are slated to converted to Best Buy stores, while the remaining 66 (primarily those in proximity to a Best Buy) were closed permanently.[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 who 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 1990, 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.[1][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 Greenfield Park, Quebec.[3]

At the end of March,[year needed] 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 United States expansion until the existing U.S. stores improved their sales performance figures.

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 had continued to operate Future Shop as a separate division, with most locations under their original name. Some new Future Shop stores were added, most recently in South Edmonton Common in Edmonton. The company also renovated 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 a few cases across the country, either the existing Future Shop location was in the same shopping centre as the more-recently opened Best Buy location or the two stores opened in tandem in close proximity. Examples include 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; in St. John's, Newfoundland and Labrador; and Northland Village Mall in Calgary. 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 and closure[edit]

On January 31, 2013, Best Buy announced that it would begin to close various locations, including 8 Future Shop locations effective immediately, as part of a "long-term transformational strategy to optimize the company's retail footprint across the country." The company also planned to target more resources toward its online retail operations to compete against other major online retailers such as Amazon.com.[6] These closures included locations in New Westminster, Nanaimo, Victoria, Langford, Surrey, Lachenaie, and Sherbrooke.[7][8][1] On January 30, 2014, 950 employees across both brands were laid off.[7]

In 2014 and 2015, other Future Shop locations were closed, including those in Boucherville, Greenfield Park,[9] Montreal,[10] Ottawa,[11] Regina,[12] Kingston,[13] New Minas,[14] and New Glasgow.[15]

On March 28, 2015, Best Buy announced that as part of a consolidation process, all Future Shop locations would be closed effective immediately, and that it would begin the process of converting 65 of them into Best Buy-branded stores to re-open the following week. The other 66 locations will remain closed permanently: Best Buy argued that these closures and re-brandings were intended to reduce redundancy, as the affected stores were located within close proximity of a Best Buy—sometimes within the same lot as each other. The closures resulted in the loss of 1,000 part-time and 500 full-time jobs. In turn, the company announced that it would invest $200 million into its remaining Canadian locations, and begin to offer home appliances across all Best Buy stores in Canada.[6]

References[edit]

  1. ^ a b c "Future Shop stores closed across Canada, some to become Best Buy". CBC News. March 28, 2015. Retrieved March 28, 2015. 
  2. ^ a b c "Future Shop Ltd. Company History". Fundinguniverse.com. Retrieved January 10, 2012. 
  3. ^ "Future Shop opens its first-ever Liquidation Centre in Longueuil, QC". Futureshop.ca. December 12, 2011. Retrieved April 25, 2012. 
  4. ^ Harrington, Mark (March 9, 1999). "Future Shop to Close U.S. Stores". Crn.com. Retrieved January 10, 2012. 
  5. ^ "Timeline for Chapters". Allbusiness.com. Retrieved January 10, 2012. 
  6. ^ a b "Future Shop shutters Canadian stores, will re-brand as Best Buy". The Globe and Mail. March 28, 2015. Retrieved March 28, 2015. 
  7. ^ a b "Best Buy, Future Shop to layoff 950 employees". Toronto Sun. 
  8. ^ "15 Future Shop and Best Buy stores closed across Canada, 900 employees laid off". Vancouver Sun. Retrieved March 28, 2015. 
  9. ^ "Future Shop ferme deux magasins". Ccanoe.ca. 
  10. ^ "EXCLUSIF: Un futur Marché Adonis aux Galeries d’Anjou?". Mercier Est. 
  11. ^ "Future Shop in Gloucester to close up shop". CTV News Ottawa (Bell Media). 
  12. ^ "Regina Future Shop closing Monday". Leader Post. 
  13. ^ "Future Shop to close its Kingston store". The Kingston Whig-Standard. 
  14. ^ "Future Shop closing two Nova Scotia locations, including New Minas store". kingscountynews.ca. 
  15. ^ "New Glasgow Future Shop closing Friday". ngnews.ca. 

External links[edit]