American electronics retailer Best Buy is completely closing its Chinese retail chapter as it streamlines its global business to focus more on its North American operations.
The chain will sell the entire 184 stores under its Five Star banner to domestic real estate firm Zhejiang Jiayuan Group. Financial terms of the transaction were not disclosed, with both firms declining to comment.
However, the company will continue to operate procurement and private-label goods operations in China.
The current deal is subject to regulatory approval, and is expected to close in the first quarter of fiscal 2016.
In 2011, the Richfield-based company closed nine Best Buy-branded stores in China. With the current deal, Best Buy’s Chinese retail presence would be a goner.
Best Buy has been struggling to retain a foothold in the Chinese market overwhelmed by competition and online surge.
The move is a part of new turnaround plan chalked out by chief executive Hubert Joly.
"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," Joly said.
Best Buy has invested a lot of money in its website and has leaned on suppliers to help finance improvements to its more than 1,400 US stores.
It also exited Europe last year, selling its 50% interest in Carphone Warehouse Group PLC’s European business back to Carphone in a deal valued at about $775m.