Burnaby-based Best Buy Canada is laying off 950 employees at its Best Buy and Future Shop stores across the country, the company announced January 30.
Industry observers anticipated streamlining given that its parent, Minneapolis, Minnesota-based Best Buy Co. (NYSE:BBY), announced sluggish sales during the holiday season on January 17.
"Anybody who watches the retail industry and has been seeing what's been going on over the past five years would not be surprised by the fact that this company or anybody in its sector would be shedding staff," Jim Smerdon, Colliers vice-president and director of retail consulting, told Business in Vancouver January 30.
"It's going through a fundamental change in how people acquire goods given how sales are shifting online."
Best Buy Canada did not announce any store closures. Instead, it noted that it plans to consolidate sales departments and reduce management layers in its large format Future Shop and Best Buy stores.
"We have been focusing on simplifying our store structure and increasing efficiencies to better align with the changing needs of our customers," said Best Buy Canada president Ron Wilson in a release.
Those changes include opening smaller-format stores, named Best Buy Mobile, which focus on smartphone sales and compete with Vancouver-based Glentel Inc. (TSX:GLN)'s WirelessWave branded stores.
Changes also include following the strategy attempted by struggling U.S. retailer JCPenney (NYSE:JCP) during its attempted revitalization: opening stores within the stores.
Best Buy Canada so far has 176 stores-within-stores, or kiosks operated by vendor partners including Microsoft Corp. (Nasdaq:MSFT) and Samsung.
"Store closures are looming," Smerdon said. "They are probably simply taking stock and evaluating which stores they can get value out of for a consolidated sale of current properties if they own them or selling a collection of desirable leasehold properties to another retailer," he said.
