Future Shop Inc. announced Wednesday that it will close its four electronics, computer, music and appliance stores in Utah as part of an effort to cut losses in lower-performing markets.
The company, based in British Columbia, Canada, will lay off about 200 full- and part-time employees as it closes its stores at 750 N. Main St. in Layton, 7220 S. Union Park Ave. in Midvale, 50 W. 1300 South in Orem and 5790 Redwood Road in Taylorsville.The Layton and Midvale stores opened in 1995, while the Taylorsville and Orem stores opened in 1996.
Gary A. Patterson, Future Shop's chief financial officer, said several factors made the Utah stores expensive to operate, primarily high shipping costs from the company's distribution center in Seattle.
"We also opened those stores at a time when we were opening fairly large stores, and those are expensive and need a high volume of sales to make money," Patterson said Thursday. "We were hoping we could build our sales volume to cover those costs and make a go of it, but it didn't (happen)."
He said competition among home electronics retailers in Utah also is intense, as national chains like Circuit City and Ultimate Electronics vie for customers with regional chains like R.C. Willey.
"When you put all of that together, it's not been very good for us," Patterson said, adding that the company may return to Utah if the situation improves in the future.
Managers from Utah stores may be offered positions at other Future Shop locations, he said, and other employees will receive a severance package.
Patterson said the four Utah stores and a store in downtown Portland, Ore., will close after running liquidation sales over the next four to six weeks.
Wesbild Inc., a company affiliated with Future Shop, will assume financial responsibility for the leases of the closed stores and try to lease them to third parties.
A company press release said that, along with elimination of unproductive stores, Future Shop's new strategy will include renovation of its successful stores and expansion of its presence in existing and new markets.
The press release said the company expects its new plan to bring gains in more established markets.
Future Shop, which has more than 100 stores in the United States and Canada, will take a one-time charge of about $10 million in the second quarter as a result of the reorganization.