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article imageCanadian retailers announce job cuts, closures

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By Veronica Silva Cusi     Feb 1, 2013 in Business
Canadian retailers Best Buy and Sears have announced job cuts of up to 1,600 combined in what analysts describe as the face of the changing retail landscape.
Best Buy Canada said on its website that seven Best Buy Big Box and eight Future Shop stores across the country will close as part of the company's "transformational strategy." But the company statement didn't reveal exactly how many employees will be affected, only that "previous workers" will be prioritized should they consider working in other Best Buy stores.
Vancouver Sun reported that the closures will result in 900 jobs losses.
Best Buy said that closing immediately are five Best Buy stores in British Columbia and two stores in Quebec. For the Future shop stores, affected are one store in British Columbia, two in Quebec, one each in Manitoba and Calgary, and three in Ontario.
CTV Montreal reported that affected Future Shop employees were surprised about the closures.
Meantime, Vancouver Sun also reported that Sears will lay off 700 employees as part of the company's right-sizing and restructuring efforts. The job cuts will be across the company -- from head office to retail outlets.
Analysts discuss fallout
Analysts speaking to media said that layoffs in the industry are expected, especially after the holidays, and that the announcements reflect the changing realities in retail.
Vancouver Sun quoted retail analyst John Winter as saying that February is usually the time of the year to hear of such industry restructuring, but the announcements can also mean that consumers are still not spending too much.
Winter also noted that retail brick-and-mortar are affected by the shift to online shopping, given the ease and convenience in this type of shopping experience.
Bell's CTV, on the other hand, quoted another analyst as saying that the Best Buy retail concept is challenged by online competition, and that Sears has been struggling for some time now, even its American parent.
In a television interview, analyst Doug Stephens said the Best Buy outlets served as showrooms to customers who check out the products in store, only to buy online from competitors at lower prices.
Stephens lamented that Sears has been losing customers to competition and it is in for more competition, such as Target Canada, which announced the opening of its stores this spring.
The Source
In the meantime, Bell's The Source announced that it would be opening 20 smaller retail stores this year to bring its total retail footprint to more than 700 outlets.
The Source said the "smaller box" concept is more appropriate for their customers, who are looking for easier ways to shop.
Aside from adding stores, The Source said it will also renovate 50 existing stores this year to modernize the look and feel of the stores.
Bell acquired The Source, a consumer electronics retailer, in 2009 to expand Bell's Internet, digital TV, and home phones, and wireless services.
Best Buy Canada said the next phase of its "Renew Blue” strategy is to open small-concept Future Shop web stores and more Best Buy mobile locations across the country.
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