April 08, 2015 - 7:28 PM
THOMPSON-OKANAGAN - If Andre Blanleil gets any satisfaction from the demise of his retail competitor, electronics giant Future Shop, he doesn’t show it.
“They were good competitors. They did a good job for the market they were going after,” the president of Andres Group of companies says.
The regional chain operates 21 locations under the Andre’s Electronics Experts, Andre’s Car Audio and Andre's Telus banners, with locations from Penticton to Prince George.
His respect for Future Shop, however, doesn’t stop him from criticizing the business model employed by the now-defunct chain, which announced late last month it would close nine B.C. stores, including the one in Kelowna.
“It really wasn’t a surprise within the industry,” he says. “I’ve heard rumours they were losing millions every month.”
Future Shop begain its retail life with a single store in Vancouver in the early '90s, expanding quickly across the country. U.S retail giant Best Buy bought out the chain in 2001, but continued to operate them separately from its own stores, which in some cases saw the two banners operating just a few hundred metres apart from each other. The thinking at the time was it allowed consumers the perception of choice in electronics marketplace, but over the years it became apparent the two companies were just eating each other’s lunch.
“They were trying to eat market share,” Blanleil says. “It worked for a while but it never really made sense to me going with two stores, two different flyers and so on. What they are doing now is bringing the Best Buy model and putting it in all their Canadian locations.”
He also thinks the huge stores they operated — the Kelowna Future Shop was about 25,000 square feet — lead to a much more impersonal shopping experience, something his own staff try hard to avoid.
“Our stores range from 4,000 to 10,000 square feet, which I think is much more reasonable, in terms of customer service,” Blanleil says. “When you get stores that big, it gets really hard to man them properly, get the expertise you need in there. Our stores are much more reasonable when it comes to rent or mortgage. We can really focus on the half a dozen staff we have in each store that are doing this for a career.”
If longevity is any indicator, Andre's long-term viability seems secure. Blanleil joined the business in 1980, taking over from his father who opened a TV repair shop in 1976. Still, he is under no illusions about the current state of retail consumer electronics, which operates on razor thin margins and is under direct assault from online retail behemoths like Amazon and eBay.
“Price erosion keeps happening. You can buy a 70" TV for one/third of what it cost five years ago. The market is very competitive and our industry is certainly not having an easy time of it,” he says. “Even the suppliers are leaving the market place. Toshiba has left Canada. Sharp announced last week they are leaving.”
Andre’s edge as a relativelly small, regional chain is that it’s not really completely independent. Blanleil says his chain is part of the Power Group, Canada’s biggest bulk buying group, which includes over 200 stores across the country and helps with marketing and promotional campaigns.
“I don’t think a standalone independent could survive in this marketplace,” he adds.
It’s that safety in numbers that has allowed Blanleil to survive and even expand. The company is opening a new store in Quesnel and upgrading an existing store in Hundred Mile House.
The company’s main product, audio equipment, also provides a slight edge in the vicious online shopping wars that are decimating brick-and-mortar retail stores across North America.
“The thing with audio is you can’t really test it online. If you like a speaker, you still want to make sure you listen to it,” he says. “You can’t do that online.”
That doen’t mean Blanleil ignores that market segment.
“It’s a growth sector and its a big part of what we do,” he says. “Our website automatically searches all of our competitors and adjusts our pricing to match.”
While the demise of Future Shop provides a bit more elbow room Blanleil says it won’t change his over-arching strategy, other than perhaps allow him to pick up some experienced staff from amongst those laid off from some of his former competitor's shuttered locations.
“We’ve got things going that we’ve been looking at for the last five years, like what markets we want to hit,” he says. “This doesn’t change the grand plan. In our business, you are either going forward and learning and getting better or you're going backwards.”
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News from © InfoTel News Ltd, 2015