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Future Shop
From Wikipedia, the free encyclopedia
| Best Buy Canada (Future Shop) | |
|---|---|
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| Type | Home electronics store |
| Founded | 1982 |
| Headquarters | Burnaby, British Columbia |
| Key people | Mike Pratt President/COO Best Buy Canada |
| Industry | Retail |
| Products | Electronics |
| Revenue | $3.6 billion CAD (2006) |
| Employees | 14,000 |
| Parent | Best Buy Canada |
| Subsidiaries | None |
| Website | www.futureshop.ca |
Future Shop is a chain of consumer electronics stores owned Best Buy Canada Ltd. Future Shop currently operates a total of 131 stores across all of Canada's provinces as of December 2007. Up until the summer of 1999, Future Shop had locations in the Western United States, a regional office and distribution center in Kent, Washington. Underperforming sales caused the locations to closed down during 1999, with most locations becoming Best Buy.
Future Shop was purchased for over C$500 million by Best Buy Canada on November 4, 2001. The company was renamed Best Buy Canada - a wholly owned subsidiary of Best Buy. Best Buy Canada has continued to operate most of the Future Shop locations under their original name, as well as opening Best Buy stores in Canada.
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Future Shop was founded in 1982 by Iranian entrepreneur Hassan Khosrowshahi, who left the country of Iran to settle in Vancouver, British Columbia, Canada to start a business in retail.[1] Khosrowshahi graduated from the University of Tehran with a degree in law and economics and was a part of the family that owned the Minoo Industrial Group, a large Iran manufacturer of pharmaceuticals, cosmetics, and food products. Khosrowshahi planned to open a chain of consumer and home electronics stores and take over the Canadian retail market. His associate, Mohammad Kiabakhsh, took the role of president and CEO of the newly formed company and Khosrowshahi himself served as chairman and founder. In 1983, Future Shop opened the first three stores. All three store were located in British Columbia. The company was selling products such as computers, software, games, videocassettes, audio equipment, music, among other items. By December 1983, the first month all of the Future Shop stores were opened and making business, the company reached $2.8 million dollars in sales.[1]
By 1993, Future Shop became the largest retailer of computers and consumer electronics in Canada and was operating 38 stores across the country and parts of the United States.[1] In August 1993, Future Shop went public on the Toronto Stock Exchange, making $30 million dollars to be used for expansion and to pay off debt.
In 1995, competition between Future Shop and its rivals, including A&B Sound and many more, caused the company to start volume purchasing, and the chain that would expand the fastest would be able to acquire the best deals on merchandise, give out the lowest prices to customers, and plan major further growth for new stores in the companies.
By the end of the year, Future Shop's sales had reached the $1 billion dollar sales mark. Increases were caused by major expansion within the company, with the desire for more and better locations, while sales at the chain's top locations began to slip in profits and eventually decline to the point where the stores would have to close and liquidate.[1]
In 1997, Future Shop announced a change in management, with Kiabakhsh leaving the company. Khosrowshahi took on the roles of president and CEO in addition to serving as chairman. Many people from the company headquarters were fired shortly afterward.
At the end of the March, Future Shop's Canadian division had produced record setting sales and earnings for the company, however, the company's earnings were down 20 percent from the previous year, due to many losses caused by its failing U.S. operations. Despite plans for more locations in the U.S. among the next several years, the company instantly stopped any new plans for further expansion in the United States until the existing U.S. stores improved their performance in sales.
In 1998, Future Shop purchased the Canadian division of Computer City from CompUSA, which was only three months after the Computer City chain had been merged into CompUSA and either converted to CompUSA or closed and liquidated. During the next year two of the Computer City retail stores had been liquidated due to poor sales.
By the end of 1998, the U.S. locations of Future Shop were performing badly, with $53 million dollars in losses over the last few years, and Future Shop projected another $30 million in losses would occur by the closing end of the next year. After the major losses in sales, in March 1999, the company announced that it would close U.S. operations, holding liquidation sales and shutting for good in the summer.[2] The closures left Future Shop with 81 stores across Canada. Many of the former stores ended up converting to one of its major U.S. competitors, Best Buy.
In 2000, Future Shop had owned 83 Future Shop stores and five Computer City stores. In June 2000, Future Shop announced plans to open flagship stores in downtown Vancouver, Toronto, and Montreal.
In February 2001, Future Shop announced that the company would close and liquidated the five remaining Computer City stores due to poor sales. At the same time, Future Shop also attempted to acquire Chapters, a chain of book stores in Canada, but failed to come up with a reasonable offer for Chapters.[3]
In March 2001, Best Buy and Future Shop announced in September that Best Buy would acquire Future Shop for $387 million. Despite possible conversions to the Best Buy nameplate, Future Shop was to be run as a separate division under the name of Best Buy Canada. The acquisition caused Khosrowshahi to have to step down as president. The other executives from Future Shop retained their positions within the company.
- Computer hardware, software and accessories
- Major appliances and small household appliances
- Stereo and portable audio equipment and accessories
- Car audio and other such electronics
- Televisions, VCRs, DVD players and other home theatre equipment
- Digital cameras and accessories, video cameras, and digital photofinishing under the name FuturePhoto
- PDAs, cellular phones and other portable electronic devices
- CDs and DVDs
- Gaming console and portable systems and games