Customers and workers surprised as Best Buy shutters 15 stores, including Future Shop at Forum
MONTREAL—On Thursday morning, Ishmael Amin arrived at work to discover that he had become a statistic.
Without warning, electronics retailer Best Buy shuttered 15 locations across Canada on Thursday morning, firing 900 employees in the process. Amin was one of those Best Buy employees to find himself suddenly without a job.
For eight years, Amin had worked at the Future Shop inside the Montreal Forum—Future Shop is a brand operated by the American retailer.
Amin was one of hundreds of employees on Thursday who showed up at work to discover the doors locked and notices plastered on windows saying the stores were closed until further notice.
In Montreal, the Forum location was closed as well as a Future Shop in Laval’s Ste-Dorothee sector. Two Best Buy stores were also closed in Lachenaie and Sherbrooke.
One former Best Buy employee contacted CTV Montreal to say he, along with more than a dozen other employees, had been laid off from the LaSalle store last Friday.
In a statement, Best Buy said it's part of a plan to “eliminate redundant operating systems and to optimize its real estate strategy to reflect a more a changing retail landscape."
While shocked loyal clients understood that some stores weren't busy, the one at the Forum was, leaving some employees wondering if the sudden closure had anything to do with a recent attempt to unionize the store’s workforce.
An agreement between management and the budding union was due on Feb. 1, a day after the closure.
For its part, the union believed the closure more to do with disappointing sales. Regardless, the closure leaves a big hole to fill at the old Forum, one that owners said was very profitable.
Best Buy and Future Shop employees will receive severance pay, which is some good news for Amin, who has a young family to feed.
“Unfortunately, right now I don't think job opportunities are that great, so we'll see,” said Amin.
Retail analyst John Winter says layoffs following the frenzied Christmas shopping season are commonplace.
"February is the cruelest month in retail because you find out how you've done in the holiday season," he said. "It's cyclical."
Despite this, the layoffs and the store closures can also be a signal that consumers are still not spending as much money in stores compared to pre-recession levels, and when they are making purchases -- they're increasingly doing so online.
Winter says the electronics sector has been particularly hurt by declining sales in music and large-screen television screens, two areas that used to be big money-makers.
They're also facing tough competition from discounters and online stores, a victim of what's known as "showrooming"—when people browse in stores and then buy the products more cheaply online from competitors such as Amazon.
Retailers are also preparing for the entry of U.S. discount chain Target (NYSE:TGT), which will be making its Canadian debut in March. Target plans to open between 125 to 135 stores in former properties owned by homegrown retailer Zellers.
"Everybody is just about to get hit by a tornado," said Winter.
On Thursday, Sears Canada announced it’s letting go 700 workers across the country in a bid to "right-size" and restructure its business.
Future Shop was founded in Vancouver, British Columbia in 1982, and expanded into the U.S. In 1999 the American company Best Buy bought all the U.S. Future Shop locations and two years later picked up the Canadian operations as well.
Best Buy continued to run both chains, in many cases with two outlets located in very close proximity.
Last year Best Buy shut down 50 stores in the United States.
—with files from The Canadian Press.