Best Buy Canada announced today that it will be closing 15 locations across the country, including seven Best Buy-branded locations, and eight stores bearing the Future Shop moniker (a Canadian electronics reseller Best Buy acquired in 2001). The store closures will result in 900 layoffs, but those employees will have first dibs on jobs at smaller outlets focused on mobile device sales the retailer plans to open in place of the closing stores.
While the closures only affect 15 of the 228 locations operated by Best Buy under the Future Shop and Best Buy brands, that still makes up around 10 percent of their total sales floor surface volume, according to the National Post. Sales for Best Buy fell 6.4 percent internationally over the course of 2012, the company reported during its most recent quarterly earnings report. Sales also dropped 8.2 percent in the quarter ending in November of last year in Canada and China, so there appears to be a continuing decline overall in those markets.
The closure and launch of smaller stores reflects a preference to target the growing mobile phone and tablet market, over legacy products like TVs and computers that carry smaller margins and have higher carrying costs. Best Buy locations have massive sales floors, but also huge warehouses and stock rooms to house the goods that populate those floors since shelves can only hold so many TVs at once. Best Buy Mobile locations, by comparison, have far smaller physical footprints and drastically reduced requirements for storing in-stock items.
The retailer has been beefing up its online store at the same time as it is trimming back brick-and-mortar, adding entirely new categories of goods to its web-based selection, including sporting goods, outdoor items and various lotions, most of which are available online only, so it’s no surprise to see them shed costly real estate.
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