RE: Circuit City, Best Buy, Future Shop, and Canadian currency values:
The value of a currency is a moving target. In the last decade or so the $C has been as high as $US 1.10 and as low as it is now (around $US 0.70). Not surprisingly, that is the traditional trading range of $C over the last 100 years (the value of $C vs $US was always above parity prior to the first Canada-US Free Trade pact ... the Auto Pact of the 1960's).
No business can plan against such volatility and assume there is a business plan there alone; you need to look at a market as a whole, not just one aspect of it, and the Canadian audio reseller market is in many ways more resilient than you might assume. There are a large number of audio manufacturers whose distribution channel for all of North America comes from Canada, not the US.
Plus the Canadian market is unique and it's a huge mistake to think it is a clone of the US market; Circuit City would need to take the expansion on as being just as difficult as the US startup. There are a number of examples where failure is the result, but for the most recent examples you could ask Tim Hortons (Canada>US) and Target (US>Canada) and see what they say about it, when their business plans treated the markets as fundamentally the same. They clearly are not.
Furthermore, the $C only seems devalued; if your financial research level stops at $C to $US. Over that same time period, the Canadian dollar has appreciated against virtually every currency on Earth except for $USD.
It's one thing when your products are of NAFTA origin but quite another when they are made in the People's Republic of China (PRC), Democratic Republic of China (Taiwan), Japan, Malaysia, Vietnam, the EU, the UK, etc. and your currency has, over time appreciated against those currencies. In financial planning terms, five years is considered Extreme Short Term. Long Term starts at 20 years.
I worked for a company that earned in $US and spent in $C. When it came to currency and it's affect on pricing and profit, no two years were alike, (unless you count that they were all volatile ... $C > $USD currency value swings of +/- 30% and more were common over six months) let alone five.
Plus the value of a currency is irrelevant to prices ... earnings (wages) are significantly different between Canada and the US with most middle-class wages (and in particular public sector wages) in pure dollar terms much higher in Canada. Ask a US teacher about entry-level wages of $50k, or a policeman about first year constables earning $65~70k; they will call you a liar, but that's reality in Canada. 25% of nurses in my province earn more than $100k. That goes a long way to paying a bit more for a pair of speakers. (While you are at it, ask them about their 3 weeks paid vacation, which is the law in my province after 12 months employment).
The President of General Motors famously said it costs him $700 a car to pay for US health care, that money goes right to the paycheck of his Canadian workers. Plus wages and prices are a constantly moving target. It would be a testament to Circuit City's likelihood of survival if they looked at Canada and ran, not walked, away, until they were very well established at home.
