Best Buy global contraction bid farewell to the Chinese market?

Chen Shijun newspaper reporter Shanghai reported

Best Buy into China eight years, may finally come to the Chinese market completely "bye bye" time.

Recently, multi-party news came out that Best Buy, the world's largest consumer electronics and electronics retail group, has been accustomed to withdrawing as quickly as 300 million U.S. dollars after accustomed to its business in China for many years. Bank of America Merrill Lynch, a world-renowned investment bank, has been hired to evaluate various options and overseas asset portfolios.

Foreign media quoted sources as saying that Best Buy is looking for buyers for their China business or partners, hoping to better focus on the development of the U.S. market.

In 2006, once-buoyant Best Buy acquired China's regional electronics chain stores Five Star, which became Best Buy's main sales channel in China (and in addition to Best Buy Mobile) after it shut its own stores several years ago. June 26, Five Star Public Relations received an interview with 21st Century Business Herald, said the company did not make any comments on rumors and rumors, Five Star will focus on doing their business.

Bid farewell to the Chinese market?

In early 2006, Best Buy took the lead in setting up an office in Shanghai, China. In January the following year, Best Buy, the first electric store in China, opened its business in Shanghai. Just this year, Best Buy completed a strategic injection of five-star acquisition of the strategic plan, 180 million US dollars of investment won the latter 51% of the controlling stake.

In 2011, Best Buy, the local retailer led by Suning squeezed the situation has been no improvement, announced the closure of all stores in China, a total of nine. It also closed its retail headquarters in Shanghai and integrated its operations in China into the Five Star brand. At that time, Best Buy global executive vice president and Best Buy Asia Pacific president, said (Patel) for the future path of development in China explained: "The future of Five Star is Best Buy's stage in China's competition."

When the store was closed, it was reported that five-star appliances are on the verge of being acquired. At that time, Five Star responded: "We never considered selling the company's plan, but in addition to self-built stores, does not rule out the acquisition of other areas by buying home appliances chain to enter the new area."

With the number of stores in the past two years and the growth of Pingdingshan, Five Star Appliance compared to the rest of several major chain of home appliance stores, the performance level of basic can belong to the upper. In 2013, Five Star successfully turned losses into profit, and achieved a more than 30% increase in operating profit in the first quarter of this year. The increase ranked the top in many overseas markets of Best Buy.

However, in the eyes of Best Buy global policymakers with a clear redline of earnings, such speed growth seems unlikely to be satisfactory.

In Best Buy China president and CEO of Five Star Zhou Meng under the leadership of Five Star is doing the final sprint performance. Zhou Meng has said that the strategy of Five Star Appliance in China is still mainly to boost store profits, the short term will not be large-scale expansion of the number of stores.

"Currently, Five Star has nearly 200 stores in China, and this time is vigorously promoting the upgrading and expansion of its flagship store, BIG BLUE, while the company is also actively promoting strategic future projects such as e-commerce and new product category." The company's public relations department said .

"Focus" contraction

The embarrassment Best Buy encountered in overseas markets has collectively exploded in several dimensions.

In just half a month, the Nasdaq-listed Best Buy, the United States stock price once dropped sharply from December 30, 2013 $ 40.18 to January 13 this year, $ 24.13, the market value of evaporation of nearly 40%, is now in a slow recovery Among them.

In last year's traditional holiday shopping season, Best Buy global same-store sales remained weak, down 1.4%. The company also attributes its main reason to the decline in China and Canada's market performance.

Under intense pressure, iron-fisted policy frequently. After joining Best Buy in the fall of 2012, global chief executive Hubert Joly set out to reduce management and lay off hundreds of people internally. In addition, we hope to stop the decline in sales by closing hard-to-profit entity stores and boosting Best Buy's cash reserves. Coupled with the earlier Bert Joly made the "hope to focus on the US market," the statement, all of the above make the outside world directly linked to the recent rumors of closure in China.

Just in May 2013, Best Buy has just sold its stake in a European joint venture to its partner Carphone Warehouse for less than half its price of $ 775 million five years ago. (Editor Yang Ying)