FutureShop, the largest electronic appliance retailer in Canada, suddenly announced the closure of all its physical retail stores in Canada at the end of last month. After a week of closure, some stores have been renovated and reopened with the BestBuy name.

FutureShop is the most famous electrical appliance chain store in Canada. In 2001, Best Buy (BESTBUY) of the United States acquired the company for 580 million Canadian dollars, but after the acquisition, FutureShop still operates as an independent department with the original name.

Best Buy announced on the 28th of last month that 66 stores operated by Future Shop will be closed immediately, and the other 65 will be changed to BestBuy stores.

The statement said that the store closure action will start on the 28th, and 66 Future Shop branches with duplication and operation problems will be closed, and the other 65 branches will change their signs to Best Buy within a week to continue operating. Canadian consumers will no longer see Future Shop, which has existed for 33 years. These electrical appliance stores will become a memory.

The first Future Shop in Canada was born in Vancouver in 1982. In 8 years, Future Shop became the largest retailer of consumer electronics in Canada.

In 2001, it was wholly acquired by Best Buy, which became the parent company of Future Shop in Canada. By 2013, due to the direct impact of the popularity of online shopping on its market, Best Buy not only adjusted its store business in the UK and Europe, but also gradually closed its Future Shop and Best Buy stores with low retail profits.

In 2014, Best Buy also withdrew from the Chinese market by selling its wholly-owned subsidiary Five Star Appliances to Jiayuan Group at a low price. Since then, Best Buy's retail business has completely shrunk to the North American market, covering Canada, the United States and Mexico.

After the business reorganization, all reservations, after-sales warranty, returns and shopping cards of Future Shop will be taken over by Best Buy, but the human resources of the department store closures have been hit by layoffs, which has also caused dissatisfaction among some old employees. It is reported that Best Buy's restructuring costs are expected to be about 250 million to 350 million Canadian dollars, including the conversion of Best Buy stores in the next five years, the handling of some stores, and severance pay for laid-off employees.

Retail industry analysts are not surprised by the sudden closure of Future Shop. The impact of online shopping on physical stores in recent years is the main reason. Liu Bo, editor-in-chief of Home Appliance Network, believes that the continued decline in the Canadian dollar exchange rate is also one of the reasons for the forced reorganization.

Best Buy Chairman and CEO Ron Wilson explained in an official statement that the reason for the closure of Future Shop is that Future Shop and Best Buy stores and businesses overlap with each other. Future Shop and Best Buy stores are in the same mall, and even share a parking lot.

In the past, after being acquired, Future Shop has been given the hope of operating differently from Best Buy stores and becoming more online. Obviously, in the face of the competition from online shopping, the shrinking offline demand and the change in consumer shopping habits are the main reasons that prompted Future Shop to change its flag. The low retail profit and the hopelessness of revival have become the financial pressure for the parent company to close stores and reorganize.

An analyst told Home Appliance Network that Canada is currently in a recession cycle, "purchasing power is not as good as before", and it is more cost-effective to place orders on the Internet such as Amazon. China's electrical appliance chain is also experiencing a similar impact, but the network side is not Amazon but Alibaba and JD.com.

In the aforementioned announcement, the company also stated that it will invest 200 million yuan to strengthen more channel services, especially to expand and strengthen online sales and services, so that consumers can place orders online and Best Buy will deliver the ordered goods to their doorsteps. This is similar to Suning's business, which has transformed from a traditional retailer to an online merchant. This channel service is described as O2O in China, but in actual operation, the profits obtained cannot make up for the cost of transformation in the short term.

The pain of choosing online and offline models is happening in both Eastern and Western societies. Although the retail industry is in panic and uncertainty, it will definitely not lose the aura of a profit master in the future. Best Buy closed up 2.71% the day before yesterday, approaching its highest value of 42 yuan in 52 weeks. (HEA)