Bell Canada is taking a huge leap into the consumer electronics business by agreeing to acquire The Source, a Canadian retailer that was owned by bankrupt Circuit City. Through its purchase, Bell Canada plans to continue selling typical consumer electronics products, but will add its entire product line-up, ranging from wireless services, Bell TV, Bell Internet, Bell Home Phone and possibly even products from Virgin Mobile (NYSE: VM), which operates on its wireless network, reports Cellular-News. The integration of Bell services into the stores are expected to be completed by January 2010.
The purchase is subject to court approval and is expected to close in the third quarter at which point Bell is expected to disclose the price of the transaction. The Source will continue to operate independently following the acquisition, with a separate management team led by Ron Cuthbertson, who was most recently President of retail chain. For the year ended Dec. 31, 2008, The Source reported revenue of $643 million and earnings before some expenses, such as depreciation of $27 million. The purchase of the 750 stores represents a huge retail expansion for Bell Canada, and will increase their visibility among Canadian consumers given that more than 70 percent of residents live within about 3 miles of stores operated or licensed by The Source.