BEIJING – US retailer Best Buy said it would close its nine outlets in China as well as its head office in Shanghai, making it the latest foreign big box operator to struggle in the fast-growing market.
The consumer electronics giant said it would merge its China operations into its wholly owned subsidiary Five Star Appliance Company. “The company intends to explore other more profitable growth options for the Best Buy brand and plans to reopen two of the China stores at a later date,” it said in a statement on Tuesday.
“It was a difficult decision to close the stores but we are confident in our business strategy,” Best Buy Asia President Kal Patel said, without providing a specific reason for the closures. Five Star will open nearly 50 stores in fiscal 2012, Best Buy said. The official Xinhua news agency said Five Star is currently the country’s third largest electronics retailer with nearly 170 stores.
Best Buy said store closures in China as well as Turkey and restructuring in the United States are expected to generate annual savings of $60-$70 million by fiscal 2013.
