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BREAKING NEWS: Bell Canada To Buy “The Source From Circuit City” Stores In Canada

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This Bell Canada press release that is crossing the wires as we speak has me flabbergasted. Bell is purchasing the 750 Circuit City stores that had been operating as “The Source From Circuit City” in Canada:

“The Source is a respected leader in consumer electronics retailing right across Canada. Its acquisition supports Bell’s strategic imperatives to accelerate wireless and leverage momentum in wireline services like Bell TV, Bell Internet and Bell Home Phone,” said George Cope, President and CEO of Bell and BCE.

“With its strong national presence, brand, and management team, acquiring The Source represents a competitive and cost-effective approach to ensuring Bell’s leadership in delivering the best communications products to Canadians,” Mr. Cope said. “Expanding the number of places people can buy Bell products is a core element in the execution of Bell’s strategy to achieve our goal: To be recognized by customers as Canada’s leading communications company.”

Here’s why I’m flabbergasted: Most malls in Canada have both a Bell World store (which had been Bell’s retail channel)  and a “The Source From Circuit City” store in it. So now Bell Canada has two stores owned by them that will directly compete with each other for many of the same customers in the same area of real estate. That doesn’t sound like a winning strategy to me. But then I’m a computer nerd, not an MBA. Oh yeah, then there’s the fact that according to this Globe and Mail story that notes the fact that Rogers has a deal to distribute cell phones through “The Source From Circuit City” that expires at the end of the year. I’m sure some people at Rogers HQ must be pissed as hell not be happy campers.

That likely explains their proposed product mix in the stores they just bought:

In addition to its extensive lineup of consumer electronics products, The Source plans to carry the full array of Bell consumer services at its more than 750 stores across Canada, including Bell Mobility, Solo Mobile and potentially Virgin Mobile wireless products and services, Bell TV’s industry-leading High Definition television services, high-speed Bell Internet, and Bell Home Phone products, by January 2010.

I guess to further avoid screwing themselves over confusion Bell has decided to keep the branding separate:

The Source will continue to operate independently from Bell following its acquisition and will maintain its well-known national brand, broad range of communications, computing and audio products, and its seasoned management team to be led by Ron Cuthbertson, a respected 30-year retail veteran and most recently President of The Source.

Good luck with that is all I have to say. I think this is a really dumb idea that Bell will regret shortly. Still at least the employees of these stores still have jobs…. At least for now they do. Then Bell will rightsize the company after they come to the conclusion that this is a craptastic idea.

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