Best Buy Alters Int’l Strategy, Closes China Stores
Best Buy Company, Inc., on Monday announced plans to significantly restructure its operations in China.
The Richfield-based electronics retailer plans to shutter its nine Best Buy-branded stores in China, although it intends to reopen two of them at some point in the future after the company explores “other profitable growth options.” Best Buy is also closing its two stores in Turkey.
Meanwhile, Best Buy revealed plans to open 40 to 50 Five Star Appliance stores in China-a domestic chain that it acquired in 2009-boosting its number of Five Star locations in the country to 210 by the end of the company's 2012 fiscal year.
In the United States, Best Buy will focus on the mobile market. It plans to open 150 stand-alone Best Buy Mobile stores-resulting in about 325 total.
Regarding its large-format Best Buy stores, the company intends to open between six and eight in the United States and about 18 in Canada, the United Kingdom, and Mexico, during its 2012 fiscal year.
“We're pleased to continue our investments in the Best Buy Mobile and Five Star business models, which are profitable and have significant growth opportunities,” CEO Brian Dunn said in a news release. “The actions we are taking 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 expects that its series of restructuring measures will result in charges of $225 million to $245 million during the next couple of years, but will ultimately result in savings of roughly $60 million to $70 million in its 2013 fiscal year. Excluding the restructuring charges, Best Buy reiterated its previous forecast of $3.20 to $3.40 per share in fiscal 2011 earnings.
Richfield-based Best Buy is Minnesota's third-largest public company based on revenue, which totaled $49.7 billion in its most recently completed fiscal year.