Best Buy, America's largest consumer electronics retailer, plans to close its branded stores in China as it tries to develop a more successful way of finding customers in the world's fastest-growing major economy. Best Buy has sought to benefit from the wave of rising disposable incomes in what were once considered developing economies Photo: Reuters By Richard Blackden 5:32PM GMT 22 Feb 2011
Nine Best Buy branded stores will close as the retailer devotes its expansion efforts in the country to Five Star, a domestic retail chain that it acquired for $180m (£112m) 2006. Best Buy also told investors, who have seen the shares slide almost 10pc in the past 12 months amid a broader rise in the stock market, that it will exit the Turkish market.
Like other US retailers, Best Buy has sought to benefit from the wave of rising disposable incomes in what were once considered developing economies. Brian Dunn, chief executive, said that the moves are "consistent with our strategy of driving businesses that have earned the right to additional capital while curtailing activities that we believe will not meet our return on investment thresholds".
Best Buy has been under increased pressure after its US sales during the critical holiday period between Thanksgiving and Christmas failed to match Wall Street's expectations. Mr Dunn said that rejigging its strategy will save it up to $70m a year. In the US, by far the largest market for the chain, Best Buy plans to open 150 smaller stores this year.