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Encyclopedia > Future Shop
Future Shop
Type Consumer electronics retailer
Founded 1982
Headquarters Burnaby, British Columbia
Key people Kevin Layden President/COO Best Buy Canada
Industry Retail
Products electronics, home appliances
Revenue $3.6 billion CAD (2006)
Employees 14,000
Parent Best Buy

Future Shop is a Canadian electronics retailer operating a total of 122 stores across all of Canada's provinces as of May 2007. It also had some locations in the USA but they closed down during 1999; most locations became Best Buy. Image File history File links FutureShopcurrentlogo. ... Consumer electronics is electronic equipment intended for use by everyday people. ... 1982 (MCMLXXXII) was a common year starting on Friday of the Gregorian calendar. ... Coordinates: Country  Canada Province  British Columbia District Greater Vancouver Regional District Established 1892 (municipality status) – 1992 (city status) Government  - Mayor Derek Corrigan  - MPs Peter Julian (NDP), Bill Siksay (NDP)  - MLAs Raj Chouhan, Richard T. Lee, John Nuraney, Harry Bloy Area  - City 89. ... Motto: Splendor Sine Occasu (Latin: Splendour without diminishment) Capital Victoria Largest city Vancouver Official languages English Government - Lieutenant-Governor Iona Campagnolo - Premier Gordon Campbell (BC Liberal) Federal representation in Canadian Parliament - House seats 36 - Senate seats 6 Confederation July 20, 1871 (6th province) Area Ranked 4th - Total 944,735 km... Drawing of a self-service store. ... Electronics is the study of the flow of charge through various materials and devices such as, semiconductors, resistors, inductors, capacitors, nano-structures, and vacuum tubes. ... A major appliance is a large machine which accomplishes some routine housekeeping task, which includes purposes such as cooking, food preservation, or cleaning, whether in a household, institutional, commercial or industrial setting. ... Revenue is a U.S. business term for the amount of money that a company earns from its activities in a given period, mostly from sales of products and/or services to customers. ... It has been suggested that this article or section be merged with Loonie. ... For the album by the Kaiser Chiefs see Employment (album) Employment is a contract between two parties, one being the employer and the other being the employee. ... A holding company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. ... Best Buy is sometimes called the big blue box because of the prominent design on Best Buy stores resembling a blue box. ... Electronics is the study of the flow of charge through various materials and devices such as, semiconductors, resistors, inductors, capacitors, nano-structures, and vacuum tubes. ... Canada consists of ten provinces and three territories. ...


Future Shop was purchased for over CA$500 million by Best Buy on November 4, 2001. Best Buy has continued to operate the Future Shop locations under their original name, although it is now opening Best Buy-branded stores in Canada as well. It has been suggested that this article or section be merged with Loonie. ... Best Buy is sometimes called the big blue box because of the prominent design on Best Buy stores resembling a blue box. ... November 4 is the 308th day of the year (309th in leap years) in the Gregorian calendar. ... 2001 (MMI) was a common year starting on Monday of the Gregorian calendar. ...


Future Shop operates, like Best Buy, in the style of a big-box marketer; they operate large stores with a wide range of products offering good road access. They also choose products aiming primarily for a broad consumer market, although they do sell more specialized equipment aiming highly technical users. For instance, they stock a variety of premade computer systems, and used to also sell computer motherboards and processors individually. They are also an authorized Apple dealer. Desktop computer with several common peripherals (Monitor, keyboard, mouse, speakers, microphone and a printer) A desktop computer is a personal computer made for use on a desk in an office or home and is distinguished from portable computers such as laptops or PDAs. ... Sony Playstation motherboard A motherboard, also known as main board, logic board or system board, is the central or primary circuit board making up a complex electronic system, such as a computer. ... Die of an Intel 80486DX2 microprocessor (actual size: 12×6. ...


Future Shop no longer carries motherboards, and CPUs. Future Shop instead focuses on mid to high level complete computer systems. The rationale being, that the average computer user is likely to receive a better computer at a given price point than this same user would receive had they attempted to have the same computer built by an independent retailer.

Contents

Major product categories

Exterior of a typical Future Shop store (in Ottawa also known as store #060).
Exterior of a typical Future Shop store (in Ottawa also known as store #060).

Download high resolution version (1224x810, 443 KB)Exterior of a typical Future Shop store. ... Download high resolution version (1224x810, 443 KB)Exterior of a typical Future Shop store. ... Computer hardware is the physical part of a computer, including the digital circuitry, as distinguished from the computer software that executes within the hardware. ... Computer software (or simply software) refers to one or more computer programs and data held in the storage of a computer for some purpose. ... A major appliance is a large machine which accomplishes some routine housekeeping task, which includes purposes such as cooking, food preservation, or cleaning, whether in a household, institutional, commercial or industrial setting. ... Electric egg beater Small appliance refers to a class of home appliances that are semi-portable or which are used on tabletops, countertops, or other platforms. ... Label for 2. ... A digital audio player (DAP) is a device that stores, organizes and plays digital music files. ... It has been suggested that In car entertainment be merged into this article or section. ... The video cassette recorder (or VCR, less popularly video tape recorder) is a type of video tape recorder that uses removable cassettes containing magnetic tape to record audio and video from a television broadcast so it can be played back later. ... The inside of a DVD player A DVD player is a device not only playing discs produced under the DVD Video standard but also playing discs under the standard of DVD Audio. ... Home cinema, also called Home theater, seeks to reproduce cinema quality video and audio in the home. ... 10 MP Nikon D200 and a Nikon film scanner The Canon EOS 350D The Canon PowerShot A95 Digital photography, as opposed to film photography, uses electronic devices to record and capture the image as binary data. ... A video camera is a camera used for electronic motion picture acquisition, initially developed by the television industry but now common in other applications as well. ... Digital image editing is the process of altering digital images, whether they be digital photographs or other types of digitally represented images. ... Personal digital assistants (PDAs) are handheld computers that were originally designed as personal organizers, but became much more versatile over the years. ... Several mobile phones A mobile telephone or cellular telephone (commonly, mobile phone or cell phone) is a long-range, portable electronic device used for mobile communication. ... CD may stand for: Compact Disc Canadian Forces Decoration Cash Dispenser (at least used in Japan) CD LPMud Driver Centrum-Demokraterne (Centre Democrats of Denmark) Certificate of Deposit České Dráhy (Czech Railways) Chad (NATO country code) Chalmers Datorförening (computer club of the Chalmers University of Technology) a 1960s... DVD (also known as Digital Versatile Disc or Digital Video Disc) is an optical disc storage media format that can be used for data storage, including movies with high video and sound quality. ... The Nintendo GameCube is an example of a popular video game console. ... One of the first handheld game consoles, Ball was the first product in the Game & Watch series. ...

Past Slogans

  • "Someday everyone will save like this." - 1997
  • "You'll like what the future has in store." - 2000
  • "The Power of MORE."(Alternate slogan) - 2001
  • "Come see what your future has in store." - 2002
  • "Helping Canadians connect!" - 2005
  • "We get it." - 2005 - 2007
  • "Get it for Less, Guaranteed." - 2007
  • "Ask an Expert" - 2007 - present

1997 (MCMXCVII) was a common year starting on Wednesday of the Gregorian calendar. ... 2000 (MM) was a leap year starting on Saturday of the Gregorian calendar. ... 2001 (MMI) was a common year starting on Monday of the Gregorian calendar. ... For album titles with the same name, see 2002 (album). ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the CE era. ... 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the CE era. ... 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the CE era. ... Present may mean: present (time): time that is neither past nor future a gift: thing given free of charge, gratis This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ...

History

Future Shop was founded in 1982 by Iranian entrepreneur Hassan Khosrowshahi, who left Iran to settle in Vancouver. Khosrowshahi, who had graduated from the University of Tehran with a degree in law and economics, was a member of the family that owned the Minoo Industrial Group, a large Iranian manufacturer of pharmaceuticals, cosmetics, and food products. Described by industry observers as "driven," Khosrowshahi recognized the potential of consumer electronics and set out to create a chain that would dominate the Canadian market. His longtime associate Mohammad Kiabakhsh took on the role of president and CEO of the company, while Khosrowshahi himself served as chairman.



By the end of 1983 Future Shop had opened three retail outlets in British Columbia selling computers, software, games, videocassette recorders, audio equipment, and other items. Two of these emulated the superstore concept popularized in the United States, carrying a huge range of products and stacking boxes of merchandise in a warehouse atmosphere. Brand names including Panasonic, Atari, Sanyo, Mitsubishi, and RCA provided customers with enough choices to discourage comparison shopping elsewhere. The company discounted its products heavily and spent aggressively on advertising. As Marketing Director Bill Jamieson told the Vancouver Sun, "We spend, in proportion to sales, double what our nearest competitor does. And the reason we do that is because the market is growing so fast and we're out to grab market share." He added: "We will not be undersold."



In December 1983, the first month that all three stores were in operation, Future Shop's revenues reached $2.8 million. Ten years later, Future Shop was Canada's largest retailer of computers and consumer electronics, with 38 stores and revenues of $334 million--in the midst of an economic recession that had devastated other retailers. Sales per square foot surpassed $1,000, considered exceptional by industry analysts, and net earnings reached $5 million.



In August 1993 Future Shop went public on the Toronto Stock Exchange, raising $30 million (at $11.25 per share) to be used for expansion and to pay down long-term debt. Khosrowshahi--who was extremely media-shy and refused interviews--maintained a controlling interest. Sales boomed, with six-month revenues up 65 percent over the previous year. Only two months after its initial public offering, Future Shop's share price had doubled to $22, and the company forecast sales of $500 million for fiscal 1994.



In the fiercely competitive field of electronics retailing, Future Shop had a principal Canadian rival in A&B Sound. Both chains purchased in volume at low prices, offered deep discounts (sometimes below cost), and advertised aggressively in a competition that frequently turned ugly. A&B disputed Future Shop's claim that it offered "Canada's lowest prices," running an ad that featured a man with a six-inch Pinocchio nose and the headline "We'd like to point out a few things about Future Shop." Future Shop sued to protect its good name, and A&B countersued in an attempt to end the advertising claims. The feud dragged on for several years, as A&B alleged that Future Shop employees bought out A&B's loss-leader stock during sales, wasted their employees' time, and otherwise sought to disrupt business--and Future Shop threw the same allegations back at A&B. In an out-of-court settlement, Future Shop ultimately amended its low-price claim (offering a guarantee that it would match any competitor's price), while A&B agreed to stop running the Pinocchio ad. Both parties agreed that disruptive practices would cease.



Commentators noted that the fierce competition between the two chains and other rivals hinged on the issue of volume purchasing, and that the chain that expanded the fastest would be able to secure the best deals on merchandise, offer the lowest prices, and ensure further growth. Profit margins were slim across the industry, and retailers bolstered their bottom lines by selling such higher-margin services as extended warranties and credit plans. By 1995 Future Shop's sales had reached the $1 billion mark, but increases were attributable solely to aggressive expansion, while sales at the chain's established stores began to plateau and even decline. The Globe & Mail wrote that Future Shop, "appears to have hit a brick wall." Future Shop's share price dropped to $16.



Analysts predicted that the coming of Incredible Universe megastores to Toronto would provide stiff competition and further impede sales at Future Shop. Analyst John Williams told the Globe & Mail, "This industry is brutally competitive, and this certainly raises the bar at least another notch," while analyst George Hartman voiced concern that Future Shop was "intent on the all-out pursuit of market share, sometimes at the expense" of profit. By 1996, Future Shop shares had dropped to $11.37 and analysts began removing their "buy" recommendations. The drop was attributed to a drop in demand for personal computers, declining overall sales at the chain's stores, and strong competition from U.S. retailers like Circuit City Stores. At the same time, Future Shop was expanding aggressively into the northwestern United States, opening eight stores in 1996 (for a total of 22) and laying plans for 15 more in the next few years.



Early in 1997 Future Shop announced a change in upper management, with Mohammad Kiabakhsh leaving the company. Khosrowshahi took on the roles of president and CEO in addition to serving as chairman. A number of other management executives were dismissed shortly afterward. "The intent is to evolve into a more professionally managed organization," said CFO Gary Patterson.



Future Shop began to show signs of a rebound. At the end of the fiscal year in March, Future Shop's Canadian operations had produced record sales and earnings; however, the company's net earnings were down 20 percent from the previous year, in part due to losses suffered by its U.S. outlets. Patterson announced that Future Shop would not expand further in the United States until the existing U.S. stores improved their performance, but that Future Shop would open 25 to 40 new stores in Canada.



In 1998 Future shop purchased seven Computer City stores for an undisclosed amount, only three months after the entire Computer City franchise had been purchased by CompUSA from Tandy Corporation. Within 18 months two of the outlets--deemed hopelessly unprofitable--had been shuttered. South of the border, the U.S. arm of Future Shop was suffering, with $53 million in losses over two years, and another $30 million in losses projected for 1999. In March 1999 the company announced that it would discontinue U.S. operations, leaving it with 81 stores in Canada. Analysts applauded the move, maintaining that Future Shop was wise to concentrate on its core market. Phil Boname told the Vancouver Sun that the divestiture would make Future Shop "lean and mean." He added: "Other retailers are going to have a real tiger to contend with as the company tries to make up for lost U.S. business at home." Future Shop's share price jumped on the news, to $14.50.



By 2000, Future Shop owned 83 Future Shop stores and five Computer City outlets. In January Kevin Layden, COO, was appointed president and CEO, and in June Future Shop announced plans to open flagship stores in downtown Vancouver, Toronto, and Montreal. Patterson told the Vancouver Sun: "Vancouver, Toronto and Montreal are all vibrant, downtown cities with large populations living in the downtown area. We always felt we could better serve those downtown cores, so we decided to take this step."



At the end of the fiscal year in March, Future Shop reported net earnings of $23.7 million, realizing a strong recovery from the $82.2 million loss the previous year. CEO Kevin Layden attributed the improvement to a new focus on Canadian markets, store renovations, and a booming retail market with strong demand for digital products. Future Shop's most popular products included digital cameras, DVD players, and wireless Internet devices. When U.S. giant Best Buy Company Inc. announced its intention to move into Canada, analysts predicted a huge battle for market share. "Future Shop has basically had something of a monopoly on these kinds of stores until now, but that is going to change," said retail consultant Blake Hudema in an interview with the Vancouver Sun. Future Shop claimed to welcome Best Buy, maintaining that competition would serve a positive purpose by expanding the market for consumer elec- tronics. Said Layden to the Sun, "We see being face to face with a national player on a big scale as a good thing." Nevertheless, in December Future Shop sued Best Buy for stealing trade secrets by hiring away a Future Shop senior executive and the company's real estate brokerage firm. Future Shop sought an injunction to prevent the broker, Northwest Atlantic, from working for Best Buy. The courts, however, held that Future Shop was unable to prove that a breach of confidence had occurred.



In February 2001 Future Shop announced the closing of its five remaining Computer City stores, noting that the increasingly competitive retail market for computer equipment had taken its toll on profit margins. The company took a $4 million charge against earnings, which was more than offset by a $7.8 million fee received following an unsuccessful bid to take over the Chapters Inc. bookstore chain. Future Shop accelerated its expansion plans, aiming for 120 stores by 2005, and announced plans to relocate or completely renovate at least half of its existing stores during this period. The average Future Shop store was 27,000 square feet, but the chain operated four distinct store sizes from 18,000 to 32,000 square feet depending on the location.



By March 2001, Future Shop had posted double digit sales growth for 15 consecutive months and was exuding confidence it could face down any competition from Best Buy. Instead, the two chains announced in September that Best Buy had agreed to purchase Future Shop, for $387 million in cash. The company was to be run as a wholly owned subsidiary, and while Khosrowshahi would step down, Layden and other executives would remain in place. Best Buy COO Brad Anderson noted the value of the "added human capital," stating that the knowledgeable management team would be an asset both in Canada and as the chain expanded globally. The initial takeover plan stipulated that Future Shop would eventually take on the name of its larger parent; however, as time passed, Best Buy concluded that continuing to operate Future Shop as a distinct brand would the most profitable course. Tom Healey, president of Best Buy International, said, "The customers love Future Shop. Shutting it down would be a loss of brand equity." Furthermore, noted Layden, fewer than half of Future Shop stores were large enough to justify the cost of converting them to the Best Buy format, which was estimated at $3.5 million per store. He added, "We believe there is room in the market for two national players." The two brands set a goal of commanding 30 to 35 percent of the Canadian market for consumer electronics. The goal did not seem unreasonable, as sales for Future Shop alone had surpassed $2 billion.


References

Future Shop." International Directory of Company Histories. The Gale Group, Inc, 2006. Answers.com 20 May. 2007. http://www.answers.com/topic/future-shop


External links

  • FutureShop.ca
  • BestBuy USA, the parent company
  • Reviews of Future Shop at RedFlagDeals.com

  Results from FactBites:
 
Future Shop Community Forums - Future Shop Community Forums (164 words)
Future Shop Community Forums - Future Shop Community Forums
The Forum is a place to exchange ideas, tips, information and techniques related to the products and services available in Future Shop stores.
Please review the Forum guidelines and Terms and Conditions before posting.
Business ethics: Future Shop.ca (R) (737 words)
The three sessions in the shop apparently only counts as one "repair," since all three repair attempts were made under the same "service request number." A set could go into the shop on a weekly basis for months, and still only count as a single repair.
Future Shop's is that it is still part of the first repair.
We recommend that if you are considering purchasing an expensive item from Future Shop that you discuss with the sales personnel the exact conditions under which the lemon guarantee will be implemented before you purchase the Product Service Plan.
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