Best Buy sells home appliance unit
Print Edition
BEST Buy has divested its home appliance unit in China, Five Star Appliance, as the retailer officially pulls out of the country after shutting down nine outlets in 2011.
The US retailer said in a statement yesterday that it had sold Five Star to Zhejiang Jiayuan Real Estate Group, without giving details.
Five Star currently has 184 outlets in China. The deal is expected to be completed in the first quarter of next year, pending regulatory approval. Best Buy will also sell its property in Xujiahui area in downtown Shanghai next year.
Pan Yiqing, currently Five Star’s chief operating officer, will become chief executive officer of Five Star after Jiayuan Group’s takeover.
“The sale of Five Star does not suggest any similar action in Canada or Mexico and it allows us to focus even more on our North American business,” Hubert Joly, president and chief executive officer of Best Buy, said in the statement.
Most of Five Star’s stores are in Zhejiang and Jiangsu provinces.
Best Buy said it will continue to grow its private labels of consumer electronics goods including brand names like Dynex, Insignia, Modal, without elaborating.
Best Buy bought the Nanjing-based home appliance retailer for about US$180 million in 2005 and turned it into a wholly owned subsidiary in 2009.
“Best Buy has been lagging in China’s fast changing home appliance retail market, and it is very difficult for them to catch up with market leaders,” said Liu Buchen, an independent industry commentator.
Best Buy’s business in China was lukewarm because of strong performances from rivals such as Suning and Gome and fast growing online retailers like JD.com and Alibaba’s Taobao and Tmall.
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