Appliances retailer Best Buy Co. ( BBY) is to end an eight-year-old China foray through the sale of its 184 Five Star stores to real estate company Jiayuan Group for an undisclosed price.
Best Buy in 2011 began closing Best Buy-branded stores in China to focus on Five Star and has spent the past two years working to improve the remaining Chinese business' performance, noted Best Buy President Hubert Joly. In a statement he insisted that the Richfield, Minn. group's China retreat "does not suggest any similar action in Canada or Mexico. Instead, it allows us to focus even more on our North American business."
The agreement follows an approach from Jiayuan, which wants to expand the business, Best Buy added. Five Star Chief Operating Officer Yiqing Pan will stay on and become Five Star CEO. In 2013 Best Buy agreed to dissolve a 5-year-old European retailing joint venture with the-then Carphone Warehouse Group plc.
Best Buy said it expects the Chinese sale to close in the first quarter of its 2016 fiscal year, which runs for the three months ending early May. It requires regulatory clearance.
The disposal won't have a material financial impact, Best Buy added.