Best Buy to sell China business, focus on North America
U.S. retailer Best Buy said on Thursday it will sell its struggling China business, Five Star, to domestic real estate firm Zhejiang Jiayuan Group in order to focus on its North American operations.
The world's largest consumer electronics chain didn't disclose financial terms of the sale of the 184-store network, announced in a statement.
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Best Buy has struggled to fend off Chinese rivals in a crowded market, as other U.S. firms have complained that operating in the country has become more of a challenge.
"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," Hubert Joly, Best Buy's president and chief executive officer, said in the statement.
Joly added that Best Buy would continue to invest in its private label operation in the country. Best Buy's China operations accounted for around 4 percent of its sales in the most recent financial year, ended Feb. 1.
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Jiayuan Group did not immediately respond to requests for comment.
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. 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.