Mobilicity to trim corporate store locations down to 1 per city, will focus on dealer ownership instead

In a mid-November 2011 press release wireless carrier Mobilicity stated that “since launching service in Toronto in May of 2010, Mobilicity has attracted over 250,000 customers to join its service and has by far the highest ARPU among the startup new entrants”. The company operates in Toronto, Ottawa, Vancouver, Edmonton and Calgary and has several points of distribution: corporate stores, dealer stores and various retailers such as Zellers, Staples, Walmart and a few Metro grocery stores.

However, it now seems there’ll be some dramatic change happening. We’ve received an internal document which states Mobilicity will be shifting their corporate store structure around. There’s currently 27 corporate stores – but the new direction is to sell off 22 of these locations and only keep 1 corporate-owned store per city (i.e. one in Toronto, Ottawa, Vancouver, Edmonton, Calgary). According to the document, which was written by President & COO Stewart Lyons, said that “You may notice notice some changes at the corporate store channel as we transition many of them back to dealer ownership, which they were originally. We are heading back to 1 store per market, which in alignment with our strategic plan. However, many of these stores are high performers, and dealers are interested in acquiring and operating them.” In addition, each store has an average of 4-6 employees and no word on what will happen to their jobs when the transition occurs.

There could be several reasons why Mobilicity is trimming the number of stores down. Yes, this could add fuel to the rumours of rival carrier WIND Mobile buying Mobilicity, or even their rumoured IPO… the less overhead the better for both these scenarios. Probably most obvious is to save money. Even with 250,000 subs it’s gotta be tough to make money when you’re selling $12-40 monthly rate plans. Mobilicity has always been the low-cost carrier. Everything from their handset prices and rate plans. Cutting down on their monthly store lease and employee salaries would save the company money.

Another document that we received, titled “Strategic Objectives”, says they have a “Commitment to being frugal with cash wherever possible”. Guess cutting corporate stores is where it starts.

(Thanks tipsters!)