Best Buy Canada announces the consolidation of Future Shop & Best Buy stores & websites under the Best Buy brand & a plan to ...
29 March 2015 - 1:07AM
Business Wire
To strengthen its position as Canada’s leading provider of
consumer electronics products, services and solutions, Best Buy
Canada, a subsidiary of Best Buy Co., Inc. (NYSE:BBY) – which owns
and operates both Best Buy and Future Shop stores – today announced
it is consolidating the Future Shop and Best Buy stores and
websites under the Best Buy brand and unveiled an ambitious plan to
build a leading multi-channel customer experience.
Best Buy Canada also announced today it has reviewed its real
estate footprint to address the fact 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 result of this review is
the closure of 66 Future Shop locations, effective today.
Concurrently, an additional 65 Future Shop stores will be
temporarily closed for one week as they begin their transition to
the Best Buy brand. The company will now have a total of 192
locations across Canada, including 136 large-format stores and 56
Best Buy Mobile stores.
“Currently, 80 per cent of our customers are within a 15 minute
drive to a store and this won’t change,” said Ron Wilson, President
and COO of Best Buy Canada. “We will continue to have a strong
store presence in all major markets in Canada.”
As a result of this consolidation, approximately 500 full-time
and 1,000 part-time positions will be eliminated. The affected
employees will receive severance, employee assistance and
outplacement support.
“Any decisions that impact our people are never taken lightly;
our first priority is to support them through this change,” Wilson
said. “I want to express my appreciation to the employees who are
leaving, for their contributions to Best Buy Canada.”
Providing a seamless customer experience to all Future Shop and
Best Buy customers is a key focus throughout this transition. All
Future Shop gift cards will be accepted at any Best Buy Canada
location and at BestBuy.ca. Existing product orders, service
appointments and warranties will continue to be honoured and Future
Shop purchases to be returned or exchanged will also be accepted at
any Best Buy. For information on store changes and opening dates,
customers are encouraged to visit our store locator. Customers with
any questions can visit BestBuy.ca/questions or call 1-866-BEST-BUY
(1-866-237-8289). Customers who visit FutureShop.ca will be guided
to BestBuy.ca.
Looking ahead, investments of up to $200 million dollars will be
made in Best Buy stores and BestBuy.ca, to build a leading
multi-channel customer experience. This multi-faceted strategy will
include: (1) launching major home appliances in all stores; (2)
working with our vendor partners to bring their products to life in
a more compelling way; (3) increasing our staffing levels to better
serve our customers; (4) investing in the online shopping
experience, for example by expanding in-store pick-up areas for
online customers and launching a ship-from-store program, making
in-store inventory available to online customers across the
country.
Investor Financial Update
As a result of today’s announcements, Best Buy Co., Inc. expects
to increase its capital spending by up to C$200 million
(approximately US$160 million) over the next 12 to 24 months. In
addition, the Company expects to record restructuring charges and
non-restructuring impairments in the range of C$250 to C$350
million (approximately US$200 to US$280 million), or GAAP diluted
earnings per share of US$0.41 to US$0.58. This includes C$175 to
C$225 million (approximately US$140 to US$180 million) of cash
charges – primarily related to future rent obligations and
severance – that will be paid over the next five years.
The Company also expects its GAAP and non-GAAP diluted earnings
per share to be negatively impacted in FY16 in the range of US$0.10
to US$0.20 due primarily to a temporary increase in operational
expenses associated with consolidation activities and store
disruptions resulting from our investments to support the Best Buy
multi-channel customer experience. Due to the transitional nature
of the majority of these costs, the Company does not expect this
negative EPS impact to continue into future years.
Forward-Looking and Cautionary Statements: This news
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 as contained
in Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that reflect management’s current
views and estimates regarding future market conditions, company
performance and financial results, business prospects, new
strategies, the competitive environment and other events. You can
identify these statements by the fact that they use words such as
“anticipate,” “believe,” ”assume,” “estimate,” “expect,” “intend,”
“project,” “guidance,” “plan,” “outlook,” and other words and terms
of similar meaning. These statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from the potential results discussed in the forward-looking
statements. Among the factors that could cause actual results and
outcomes to differ materially from those contained in such
forward-looking statements are the following: macro-economic
conditions (including fluctuations in housing prices, oil markets,
jobless rates and other indicators), credit market changes and
constraints, foreign currency fluctuation, the company’s ability to
manage its property portfolio, the impact of labor markets, failure
to effectively manage costs or achieve anticipated expense and cost
reductions, and disruptions in our supply chain or information
technology systems. A further list and description of these risks,
uncertainties and other matters can be found in the company’s
annual report and other reports filed from time to time with the
Securities and Exchange Commission (“SEC”), including, but not
limited to, Best Buy’s Annual Report on Form 10-K filed with the
SEC on March 28, 2014. Best Buy cautions that the foregoing list of
important factors is not complete, and any forward-looking
statements speak only as of the date they are made, and Best Buy
assumes no obligation to update any forward-looking statement that
it may make.
Best Buy Co., Inc.Canada Media Contact:Elliott
Chun, 905-494-7114Public Relationsechun@bestbuycanada.caorU.S.
Media Contact:Jeff Shelman, 612-859-4632Public
RelationsJeffrey.shelman@bestbuy.comorInvestor
Contact:Mollie O’Brien, 612-291-7735Investor
RelationsMollie.obrien@bestbuy.com
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