Best Buy to Ramp Up China Expansion
Shanghai, China Best Buy Co. said on Friday it would ramp up its expansion in China but would not grow through partnerships with local rivals.
Best Buy will invest substantially and open a large number of stores in China within the next five years, and will launch online sales in the country in the next 24 months, said Bob Willett, CEO of Best Buy International.
Willett denied Chinese media reports that Best Buy was in talks on a possible share swap with GOME Electrical Appliances Holdings Ltd., a top electronics retailer in China.
Last week, Best Buy cut its full-year outlook, citing a softer U.S. economy, but remained ambitious in its expansion plans, aiming to increase the number of its stores in China by about 20% to as many as 193 in its 2009 fiscal year, which ends on March 1 next year.
The new stores planned in China include 20 to 25 Five Star stores and five to eight self-branded stores. All new Best Buy-branded stores will be based in or around Shanghai, where the company opened its first and only such store in China in early 2007.
Best Buy, which bought a majority stake in Jiangsu Five Star Appliance Co. in 2006, will boost its ownership of the company to 100% by the end of 2010 as part of the purchase agreement, Willett said.