Pa Bell North of the Border

Market close in Toronto, for once less snowed-in than its southern neighbour, brought word that telecommunications giant Bell will buy 750 Circuit City stores in Canada. Circuit City is known as “The Source, by Circuit City” in Canada, and its outlets are actually former RadioShack stores bought from RadioShack’s former subsidiary, InterTAN, in 2004.

The Big Money’s Canadian editorial assistants, past and present, wonder about the suitability of satisfied monopolist Bell to manage such a sprawling, mall-bound retail portfolio. Its branded Bell stores have featured dim lighting and caused fights with franchisees over commissions. Meanwhile, on a macro level, attempts by the company to go private have foundered. In its release, Bell touted the “80 million technology-savvy consumers” who shop at the Source each year, a feat comparable to the “billions and billions” of satisfied customers that McDonald’s boasts. You’d have to stuff Canada’s population into these outlets two and a half times over to reach Bell’s figures.

Update, Tuesday, 2:45 p.m. ET.: Big Money reader D. Hamilton writes to say, “While Bell buying Circuit City is odd at first glance, The Source stores are strategic outlets for their biggest competitor, Rogers Communications. It's a twofer—instantly kill off the major retail outlet for Rogers' wireless operations and set up a new channel that will squeeze out their franchisees. They are going back to their old (and profitable) monopoly days.” He also pointed us to the original “Pa Bell”: A. Jean de Grandpré, who created the Bell Canada Enterprises holding company, initiating a series of adventures into foreign markets and other forms of media (including, today, parts of the CTV television network and the Globe and Mail newspaper).

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