Best Buy Cuts 950 Workers After Holiday Sales Decline
Best Buy Co. (BBY), the consumer-electronics retailer that earlier this month reported a decline in holiday sales, is eliminating 950 jobs at stores in Canada to reduce costs.
The cuts, which represent about 6 percent of the chain’s 16,000 workers in the country, include both hourly and salaried workers, Amy von Walter, a spokeswoman, said in an e-mail. The retailer isn’t closing any of its 265 stores in Canada, she said. The company has more than 1,900 stores worldwide.
“We continue to identify opportunities to improve our performance and accelerate our business transformation,” Best Buy, based in Richfield, Minnesota, said in an e-mailed statement. “Today’s news in Canada is consistent with that goal. These changes represent our effort to streamline our business and even better serve our customer.”
Best Buy’s decline in holiday sales, which triggered the biggest drop in its stock in more than a decade, raised doubts about Chief Executive Officer Hubert Joly’s turnaround strategy as price cutting narrowed profit margins more than expected.
The shares declined 3.2 percent to $23.20 at 2:46 p.m. in New York. Best Buy had gained 49 percent in the 12 months through yesterday, compared with an 18 percent gain for the Standard & Poor’s 500 Index.
The international unit, which makes up about 15 percent of sales and includes Canada, performed worse than its domestic operations. During the nine-week holiday season, sales fell 8.1 percent at the division, compared with a 1.5 percent drop domestically. The sales declines outside the U.S. were driven by previous closings of 35 large-format stores in Canada and China, the company said. Same-store sales at the division increased 0.1 percent
Best Buy established the international unit in fiscal 2002 when it acquired Future Shop Ltd., Canada’s largest consumer-electronics retailer. Since then, the chain has added Best Buy-branded stores in Canada. The cuts will be at both Future Shop and Best Buy stores, the company said.
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