The financial woes of a struggling Japanese electronics giant will begin to ripple across Canada in the coming weeks.
Sony Corp. said on Thursday it will close all 14 of its retail stores in Canada over the next two months as the company tries to turn around its slumping business amid high-profile data breaches and tough competiton in the smartphone space.
Sony's move – which came the same day as U.S. retailer Target Corp. announced it would withdraw from Canada entirely and shutter its 133 stores here – will result in store closures from Vancouver to Quebec City.
Decades after inventing the Sony Walkman and growing to dominate the consumer electronics space, the iconic Japanese firm has lost vast amounts of market share to rivals, such as Samsung Electronics, and failed to keep pace with other companies' innovation. Still, Sony's shares rose in Tokyo over the last half of 2014 as investors bought into CEO Kazuo Hirai's recovery plan of concentraing on entertainment, mobile devices such as the Xperia smartphone line and its Playstation gaming console, even though the new year has brought no respite for the firm's financial difficulties.
Sony will close three stores in the Vancouver area; two in Calgary; one each in Edmonton, Montreal, Ottawa and Quebec City; three in Toronto, and individual stores in Missassauga and Newmarket, Ont. Roughly 90 full- and part-time jobs will be eliminated as Sony shifts to selling products in Canada through third-party retailers and its online store, a Sony spokesperson in Canada said.
The spokesperson said they were not able to say whether the closings were related to cost-cutting, restructuring or ongoing moves in Japan to turn around the company's business.
In September, Sony – which has been supported by its insurance and entertainment businesses as its traditional hold on the consumer elecronics industry withered away – said it would suffer a $2.1-billion (U.S.) net loss for the fiscal year in part because it was forced to writedown the value of its smartphone business.
As demand for its TVs and digital cameras also sagged, the Japanese company said it would not pay out a dividend in 2014, the first time it has not done so since it listed on the Tokyo Stock Exchange in 1958 – the same year it launched a pocket-sized transistor radio called the TR-63.
Then, in late November, Sony Pictures discovered that it was the victim of a massive cyberattack that the U.S. Federal Bureau of Investigation has blamed on North Korea, which it said was angered over the impending release of a Seth Rogen film called The Interview. The film revolves around a fictional assassination plot against North Korean dictator Kim Jong-un.