EDMONTON — This month, Canadians may notice a new specialty electronics store in their malls as The Source by Circuit City replaces nearly 900 former RadioShack locations across the country.

“It’s probably the biggest rollout of a new store brand in Canada ever,” says Lyndsay Walter, vice-president of marketing for The Source’s Barrie, Ont. headquarters. “It has taken a lot of organizing.”

In May 2004, U.S. big-box electronics retailer Circuit City, previously not in the Canadian market, bought out RadioShack Canada‘s parent company, InterTan Inc., in an acquisition valued at $284 million US.

Then RadioShack’s U.S. parent company revoked the brand’s Canadian licensing rights from competitor Circuit City. A legal battle ensued, and earlier this spring, a Texas court ruled that Canadian stores must drop the RadioShack name by the end of June.

All the same, Circuit City prepared for the outcome, spending months developing a new brand for its Canadian subsidiary. The name conveys an identity for the 2,500-square-foot mall locations as a source for consumer electronics, and ties it to the powerful Circuit City brand, second biggest among U.S. electronic retailers, said Walter.

“It does substantiate the name,” he said.

Part of the rebranding involves new signage, as the stores transform between now and June 30. There are also billboards and transit boards depicting the new name, along with associated advertising flyers, newspaper ads, and a TV and radio campaign coming up to focus consumer awareness.

“We’re layering it into the market a little at a time because all of the stores haven’t been switched over yet,” said Walter, adding Circuit City has expanded its Canadian advertising budget by $22 million to make the new name as familiar to consumers as the old one.

Stores will also be outfitted with a new colour scheme and other interior touches to customer areas. Name-brand product lines will be expanded, and RadioShack-branded merchandise will be replaced by Circuit City‘s private label brand.

Walter said the rebranding has come off without a hitch, and credits Pattison Outdoor Signs and Quick Signs for help.

Paul Messinger, a marketing professor at the University of Alberta‘s school of business, said as an incumbent in an established market, The Source by Circuit City needs a successful communications strategy to get the public to buy into the new name.

“If they do it well, I think they will have not a large obstacle,” Messinger said.

He said other companies have successfully rebranded, including Telus, formerly known as Alberta Government Telephones, and American brewer Miller, which abandoned its “champagne of beers” strategy a number of years ago in favour of a blue-collar appeal.

Messinger said the electronic chain stores’ association with Circuit City is sound strategy. Those familiar with the brand recognize it as a U.S. big-box retailer. While its identity in Canada is different, associating the store chain with the Circuit City name lends credibility, Messinger said.

Currently, there are no plans to locate Circuit City big-box stores in Canada. But many of its product lines will be introduced into The Source by Circuit City, with a larger lineup available online, Walter said.

RadioShack, meanwhile, has not given up on Canada. The Fort-Worth, Tex.,-based retailer announced in April it will re-establish presence here with stores in a number of key locations by Christmas. It created a Canadian subsidiary company last month.

© The Vancouver Sun 2005