SHANGHAI: US’s retailer Best Buy said on Thursday it will sell its struggling Five Star China business to domestic real estate firm Zhejiang Jiayuan Group in order to focus on its North American operations.
Best Buy’s president and chief executive officer Hubert Joly said the sale of Five Star does not suggest any similar action in Canada or Mexico. Instead, it allows us to focus even more on our North American business.
Best Buy’s China operations accounted for around 4 percent of its sales in the most recent financial year, ended Feb. 1. Joly also said Best Buy would continue to invest in its private label operation in the country.
At the time, many analysts suggested the firm should also consider exiting China. The deal, which is subject to regulatory approval, is expected to close in the first quarter of fiscal 2016. Best Buy pulled out of the European market last year when it sold its stake in Carphone Warehouse Group for less than half its initial investment.
Further Best Buy has struggled to fend off Chinese rivals in a crowded market, as other US firms have complained that operating in the country has become more of a challenge.
