The British Columbia-based consumer electronics retailer announced Tuesday it will close all 23 of its U.S. stores -- including Medford's in the Crater Lake Plaza -- and says it will expand in Canada, where its sales are stronger and operating costs are lower.

Future Shop's U.S. operations had been losing money since they were launched in 1992, and efforts to turn things around weren't succeeding as well as expected, spokesman Eric Ommundsen said.

"It's been a very difficult decision to make," he said. "There's a lot of people that worked very hard -- even in the last few weeks -- to make it a success. It's a very unfortunate situation."

The company, which is Canada's leading electronics retailer with 81 Future Shop stores, lost just over $1 million ($1.6 million in Canadian currency) before taxes and unusual items through the first three quarters of its fiscal year 1999. The company's third quarter ended Jan. 2 and its fiscal year ends March 31.

The decision, made by the board of directors last week, was handed down by conference call to store managers at 4 p.m. Monday. The Medford store and others around the Northwest closed abruptly at 5 p.m. Monday -- four hours earlier than normal -- and won't reopen until Friday, when liquidation sales begin.

Medford's Future Shop, which opened in the summer of 1995, employs the equivalent of 55 full-time workers, who will work for several weeks while the inventory is sold and then be let go. Employees at the Medford store declined to comment, referring questions to the corporate office.

The other 22 U.S. stores are in Oregon, Washington, Idaho and Montana. The company also has a distribution center in Kent, Wash., which will close. It closed five stores in Utah last year.

Ommundsen said sales at the Medford store were strong but distribution costs were high because it was the company's southernmost store.

"We've been very happy with the Medford market," he said. "We have a good loyal customer base. (The decision) is not really reflective of the business we've been doing. It's more of the cost of doing the business."

The future of the Crater Lake Plaza retail space was unclear Tuesday. Attorney James Stout, who manages the property that Future Shop, Michael's and Office Depot occupy for California-based Arland Trust No. 1, said Future Shop's lease has more than a decade remaining on it and he had not yet been contacted by the company. Ommundsen said the company was still deciding what to do with its U.S. real estate, most of which is leased.

Stout was confident that another tenant could be found for the busy shopping center. "I can't imagine we'll have trouble leasing it," he said.

The chain's rapid retreat from the Medford market came as a surprise to customers and competitors.

"I just bought a computer there last week," said Rogue River's Gary Cilenti, who showed up at the Medford store at lunchtime Tuesday to find the doors locked. "This is a good place to shop. They've got good deals.

"We just bought a refrigerator there two weeks ago," he continued. "We shopped all over the valley and this was the cheapest. This is unbelievable."

Customers will get some consolation over the next few weeks as the store liquidates its inventory. Some who had heard the news were ready for the discounts Tuesday.

"I was coming to see if they have any going-out-of-business sales," said Henry Barnhart of Medford. "Hopefully there will be some good sales. I've got a computer and if the supplies are at a lower price you might as well take advantage."

One door down at Office Depot, assistant manager Blaine Woodard didn't know of the closing until Monday evening, when would-be Future Shop customers came into the competing store confused.

"We found out about it just after 5 p.m. when they closed the doors," said Woodard, noting that the stream of customers asking questions about Future Shop continued Tuesday. "They've been flowing over here."

Jeff Thomas, manager at the area's largest local computer store, Connecting Point, said he was at a conference with some Future Shop workers recently and they gave no indication that the closure was coming.

"It was a pretty big surprise," said Thomas. "Normally, you can get a glimmer of that type of thing in the trade magazines that we read. We'd heard that they were losing money."

Future Shop, which was founded in 1982, expanded into the U.S. market in 1992 but never managed to make its American operations profitable. Sales in the U.S. have increased but not enough to offset costs, Ommundsen said.

Financial breakdowns for the U.S. and Canadian operations for this year were unavailable Tuesday. But for the fiscal year that ended March 31, 1998, the Canadian operations made $20.9 million ($31.2 Canadian) while the U.S. operations lost $17.9 million ($27.2 Canadian).

The company recently purchased seven Computer City stores in Canada to go with its 81 Future Shops and plans future expansion in that country.