Best Buy the five-star electrical good source group

The deal was finalized in June this year, when the foreign-owned retail giant, who sought to buy its assets, was finally finalised by the end of 2014.

December 4, five-star Sports party facing the 21st century Economic report confirmed that Best Buy will sell its five-star electrical business to a Chinese real estate and investment company-Jiayuan Group, the latter by Shen Yucheng as chairman. As the deal is subject to regulatory approval, it is expected to be completed in the first quarter of fiscal year 2016.

Hubert Chorley Hubert Joly, Chairman and CEO of Best Buy, explained: "In the future, Best Buy will focus on North American market development." The sale of five-star appliances does not affect our business in Canada and Mexico. ”

Five-star appliances also stressed that the transaction is purely a change in equity structure, will not have any impact on the five-star electrical stores and customers. Five-star electrical brand will continue to maintain independent development, the existing management team to maintain stability.

It is noteworthy that five-star electrical appliances in the actual responsible post has changed again, the original five-star Electrical senior Vice President Pan Yiqing promoted to five-star Electric chief executive.

Who's the new buyer?

Since the opening operation is closely related to the huge cost of land, retail enterprises and real estate companies approached or even across the two business sectors, in the industry is not uncommon. Like the New World (600628. SH), Yintai commercial (01833. HK) and large local retailers such as Wanda Business are listed here.

At the end of June this year, when Best Buy hired the Bank of America Merrill Lynch, the world's leading investment bank, to assess options and overseas portfolios, the news that five-star sports were being valued for sale began to spread, and an unnamed Zhejiang real estate company was accused of "strong interest".

After a silence of about half a year, the group has finally surfaced.

Public data show that Jia Yuan Group is now the top 50 Chinese real estate companies ranked 45th, brand value of about 4.188 billion. has developed in Zhejiang, Shanghai, Jiangsu, Anhui and other 14 provinces (autonomous regions, municipalities) more than 40 cities, including the new Town business complex and other types of commercial and residential projects, 97, the cumulative development area of more than 20 million square meters.

Five-star electrical appliances revealed that the property developed by Jiayuan Group includes both apartments and villas of various types of residential properties, including hotels, community business and New Town business complex and other commercial properties. The group plans to develop innovative commercial real estate in the future, intending to achieve mutual borrowing with five-star appliances.

In a senior retail industry, it is a matter of sooner or later that five-star appliances "remarry" local businesses. "In Best Buy China's electrical business hearted, five-star electrical stores more limited geographical background, five-star electrical brand resources from the upstream and downstream industries to integrate, rather than in the peer-competitor turnover, it seems to be more conducive to the long-term survival and development of the brand." The person said to reporters.

Keith Nelsen, Global executive vice president of Best Buy, said: "Now is the right time to transfer the five-star electrical business to the local team." We firmly believe that by the Chinese market and fully focus on the Chinese market, the local team to manage and operate the five-star electrical appliances, will be more conducive to the future development of five-star electrical appliances. ”

Best Buy China dilemma

In January 2007, China's first Best Buy electric appliance store in Shanghai trial soon after, Best Buy has completed the strategic deployment of capital injection to five-star electronics, the cost of 180 million of dollars to obtain the latter 51% of the controlling power. In Jiangsu area and Suning electric appliance head-on competition and in the downwind of the regional electrical retailer five-star electrical appliances, was considered to have found the best "destination."

But after 2011 years of bad results under the pressure of the closure of all stores in China, the development of five-star electrical appliances again into a confused period.

Five-star Electric in China has 184 private-label retail outlets, after successful, Best Buy in China's business stock also hit a new low. How to solve the 78 outstanding "localization development", the old proposition was again revisited in front of Best Buy China.

"Over the past two years, we have worked hard to improve our business in China and have achieved some results," Hubert Chorley said. We will continue to invest and develop our own branded business in China, including Dennix (Dynex), Shadow Elegance (Insignia), Modal, Platinum and Swordfish (rocketfish). ”

At present, Best Buy is becoming more and more sluggish at the global level, and the early strategy of multi market long-term warfare seems to have lapsed. Revenue from the company's reporting period fell by 4% to $8.89 billion, and net profit shrank from $266 million trillion to $146 million a year earlier, according to Best Buy's second quarter business data.

Despite the success of the 2013 five-star electric turnaround, and in the first quarter of the 2014 operating profit achieved more than 30% of the increase, but it seems that the foreign management has not won enough confidence.

After this battle, Best buy in the continued development of its own brand in China's business, has been determined to no longer carry out the business of the entity store. As for the future Best Buy China's revitalization plan, the company has not disclosed any actual arrangement while demonstrating its confidence.