Best Buy Co (NYSE: BBY) has closed down nine stores in China including a retail headquarters in Shanghai but said it would open two new stores later this year. It also said it would continue to operate Five-Star Appliances and run 50 Five-Star stores by 2012. In China, Best Buy sticks to its US business practice in which it buys goods from manufacturers and resells them. Five-Star, a Jiangsu province-based home appliances retailer that Best Buy acquired on entry into China in 2006, operates by renting the stores to manufacturers to let them market their own products as well as taking commission from sale profit, which actually make it more of a commercial property developer.
Best Buy's footprints in China:
2006: Acquired a 75% stake in Five-Star (then China's fourth largest gadget chain) for $180 million; opened first China store in Shanghai.
2007: Change in China leadership of Best Buy.
2008: Opened its second China stores in Shanghai, 22 months apart from the first, and later opened another four in the city; opened a joint venture store in Beijing that was not among the nine that were closed this time.
2009: Acquired the remaining 25% stake in Five-Star for $185 million.
2010: Opened two stores in Suzhou, Jiangsu province and Hangzhou, Zhejiang province.
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