Discuss impact of Blockbuster bankruptcy on Wind Mobile? - Canadian TV, Computing and Home Theatre Forums
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post #1 of 9 (permalink) Old 2011-08-31, 09:52 PM Thread Starter
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Discuss impact of Blockbuster bankruptcy on Wind Mobile?

If you wish to discuss the Blockbuster bankruptcy please see this thread

This thread is to discuss how the loss of Blockbuster retail locations will affect Wind Mobile.

In looking at their store list, it appears that a LOT of Wind Mobile locations are in Blockbuster so you have to assume this will have a significant impact.

Thoughts on what Wind will do?

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post #2 of 9 (permalink) Old 2011-08-31, 10:47 PM
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I think they'll need to find a new distribution partner. I'm not sure who, but I bet they could find someone. Metro, Gamestop/EB games (though they're probably too small), Sears or the Bay, and Canadian Tire jump to mind. I don't know if Mobilicity's deal with Staples is exclusive, but that would be another good one.

I think we'll see a lot more Wind Mobile corporate stores/kiosks in malls too. Blockbuster was in many ways just a way for them to get a lot of distribution points very quickly following launch at minimal costs. It wouldn't surprise me if they're glad to be free of a lot of those locations, I bet they can get better terms on better locations now than they could when they signed the agreement with Blockbuster.

This will still hurt though, until they can find new points of distribution. I really think this adds more pressure on them to get into BestBuy/Futureshop and WalMart.

Edit: It should also be noted that a lot of those Blockbusters don't have whole Wind locations, just takeout.
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post #3 of 9 (permalink) Old 2011-09-01, 06:26 AM
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Question Dust in the Wind Mobile

Adding more Loblaws locations and other grocery outlets as well as more Personal Edge locations could be in the cards for the next phase of Wind Mobile's plan of attack.

Blockbuster Canada is dust in the wind, but according to wiki:

... as of June 2011, Wind Mobile had 317,000 active subscribers Canada-wide and on March 17, the shareholders of Russian mobile telephone operator VimpelCom voted in support of a $6 billion deal to acquire WIND Telecom, whose assets include Orascom Telecom, a significant shareholder in WIND Mobile. This transaction would create the world’s fifth largest mobile operator by subscribers - more than 173 million subscribers ... suck on that, Blockbuster Canada.

Wind Mobile might also decide to join forces with with a café franchise, a Yogen Fruz outlet, a convenience store and perhaps a Pizza outlet, all placed in one retail environment. I know that sounds crazy, but it's not entirely out of the question:

I removed the link because there was another forum link available on the page, but here's the important part:

WIND Mobile has well over 100 kiosks located within BlockBuster Canada stores.

Apparently 14 companies made offers to purchase BlockBuster, including Rogers, Bell, HMV Canada and Sobeys, but none of them were accepted by Grant Thornton because there were “problematic terms/conditions”.

WIND Mobile CEO Anthony Lacavera thought about proposing a mix retail environment that included a Wind Mobile store, a café franchise, a Yogen Fruz outlet, a convenience store and Blockbuster, but never went forward because it would be to complex to get approval from the receiver. Lacavera said “The average square footage is just too huge… We walked away from it. The stores, the footprint, are just too big to be useful.”
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post #4 of 9 (permalink) Old 2011-09-01, 09:26 AM
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All the Blockbusters in Mississauga closed shop shortly after the first bankruptcy announcement in June(?) so Wind lost those spots pretty quickly. There is a Wind storefront at Meadowvale Town Centre but anytime I've been by there's been no one around.
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post #5 of 9 (permalink) Old 2011-09-01, 11:55 AM
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I think the pizza/froyo outlet is an example of the kind of radical ideas they'll need to come up with in order to maintain a large enough retail presence to compete. The reality is that they can't afford to operate as many corporate stores as a carrier like Rogers, Bell, or Telus; especially since they only offer mobile service.

They need distribution partners, or they need to find other ways to share the cost of operating locations.
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post #6 of 9 (permalink) Old 2011-09-01, 12:03 PM
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We had a bunch of Blockbusters close a while back here in Calgary. Since then, Wind has been popping up in Kiosks in the malls around town. While this will have a negative effect in the short term, I actually don't think this will hamper Wind much in the future. They have kiosks, a few corporate stores, and are advertising like crazy right now. I wouldn't be surprised to see more deals with independent dealers soon either.
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post #7 of 9 (permalink) Old 2011-09-01, 06:40 PM
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I think Blockbuster has served its purpose - getting them a foot in the door.
Now that wind has a bit of momentum/growing client base, I don't see them having problems replacing take-out locations.

Since launch they've added many partners, including Loblaws stores. That covers many more places than blockbusters' alone.
(Where in a wind footprint is there NOT a Loblaws/RCSS? )

..though I wouldn't mind more yogen fruz around!
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post #8 of 9 (permalink) Old 2011-09-02, 07:30 PM
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Contingency plan helps Wind Mobile weather Blockbuster closures


Following the U.S. bankruptcy announcement, Wind began building additional stores and kiosks close to its existing Blockbuster stores-within-stores.

It was an arrangement that Lacavera says he prefers. “We've actually got better locations,” he says. “I'd prefer to have a branded store,” he adds. “A lot of the [Blockbuster] locations were grab-and-go point of sale,” he says.

“We didn't have very good exterior signage,” he says.

Now, the company has more staffed, branded locations. “We've been able to improve our street level visibility,” he adds. Wind will also continue its partnerships with other retail outlets, like London Drugs, which has a large presence in western Canada.

Wind's sales from its Blockbuster locations peaked last summer at about 20 per cent of total sales, according to Lacavera. “It started declining as we opened more of our own stores,” and now the percentage is “negligible,” he says.

“We're assuming that we have zero Blockbuster locations,” he says. He says he is convinced that the list of closures will be continue to grow.. “From what we can tell, some of the one's they're closing are some of their most high traffic locations,” he says.

Lacavera, however, does not think that the Blockbuster stores would matter much to Wind's retail footprint. “I don't anticipate any impact on Wind Mobile,” he says.

There has been speculation in the industry that Wind could potentially buy Blockbuster and continue selling, the same way that Telus Communications does with its Black's Photography stores or Bell Canada does with the Source.

“We've looked at it a number of different ways. At this particular time, no,” he says to the idea of buying the ailing company. “There was a time when we had it in our business plan,” he says. Now though, “we are past the point of there being strategic value now,” he says.

Telus' partnership with Black's is a significant one, says Bruce Herscovici, senior vice president for the consumer solutions channel at Telus. “It's equally important,” to the company's relationship with other stores known more for selling phones and wireless plans, he says.

Telus acquired Black's Photography Corp. in 2009 simply because it was a good investment. “That particular opportunity seemed like the best opportunity,” he says. He could not provide a specific percentage for sales from Black's, but he says it is significant.

“In the case of ownership, we have a much better opportunity to help bring to life our value proposition in the context of that business,” he says, but each retail partner has its value.

“Consumers have their preferred channels,” he says. A store like Black's appeals to customers who have loyalty to that store, whereas some consumers prefer stores like Future Shop where there is a perception of greater choice, he says.
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post #9 of 9 (permalink) Old 2011-09-03, 10:13 AM
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I think you'll find the closing of the remaining 250 Blockbuster will have little impact on Wind. Wind used most of these locations as "grab n go": pick up a cellphone and sim card, along with a bag of chips and a couple of DVD rentals, and activate the phone later. Some operated kiosks, staffed by Wind employees, and these were "full service" ... including full service costs. Blockbuster provided a nice kickstart to Wind's retail presence in the first year but was always an awkward fit.

The downside is it is very expensive to "keep the lights on", even at a strip mall with relatively small square footage. When you are selling handsets "at cost" and plans at $29, there can't be much revenue for the dealer / manager of these stores per sale. Employees, presumably, are paid at around industry rates, including commissions.

Wind's challenge from the get go has always been to figure out how to become Canada's "fourth national carrier". In spite of its complaints about "wanting more competition for Canadians", it wants to become a member of the club and crush / absorb the other new players. Now that it is subsidizing handsets ($0 - $95 smartphones), and seems content with $29 monthly fees, it has to figure out how to pay the costs of operating a national network until it reaches 5 million customers.
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