Best Buy Co., Inc. today announced that it has entered into a definitive agreement for the sale of its Five Star business to the Jiayuan Group, a prominent China-based real estate firm led by Chairman Yuxing Shen. This sale does not affect Best Buy’s private label operations in China.
“Over the last two years we have worked to improve our business in China and are proud of the progress we have made there,” said Hubert Joly, president and chief executive officer of Best Buy. “We were recently approached by Jiayuan Group, a respected Chinese investment group, which offered to acquire the business with plans to further expand it. The Jiayuan Group has agreed to work with Five Star Chief Operating Officer Yiqing Pan, who will become chief executive officer of Five Star. Mr. Pan has been with the business for many years and has a deep respect for Five Star employees, as well as a vested interest in continuing to work with them to build a stronger presence in China,” Joly said.
“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. We will also continue to invest in and grow our China-based private label operations, with brand names that include Dynex, Insignia, Modal, Platinum and Rocketfish,” Joly added.
Best Buy entered the Chinese retail market by purchasing a majority interest in Jiangsu Five Star in 2006 and now operates 184 stores in China, all under the Five Star brand. The transaction, which is subject to regulatory approval, is expected to close in the first quarter of fiscal 2016. The sale of the Five Star business is not expected to have a material impact on the results of operations, financial position or cash flow of Best Buy.