Five Star Appliance, Best Buy's subsidiary in China, is launching a strategic transformation and plans to add 11 new flagship stores before the end of 2014.
The news of the company's expansion is reportedly a response to the recent rumor that Best Buy would sell its assets and withdrew from the Chinese market. Prior to this, rumors circulated that Best Buy had hired Bank of America Merrill Lynch as its consultant, aiming to handle its assets in China and other overseas markets. Best Buy would reportedly gain about USD300 million by selling its Chinese assets. However, Five Star Appliance denied the rumor.
According to Five Star Appliance, the company's three new-generation flagship stores will soon open in Nanjing, Yangzhou, and Nantong, respectively. The three new flagship stores will adopt a new logo; the corporate colors will change from chartreuse to dark blue; and they will be named Big Blue.
A representative from Five Star Appliance said that in the second half of 2014, the company will promote its flagship store upgrade plans and complete the transformation of eight stores. The company will create 11 new flagship stores over the entire year.
It is undeniable that Best Buy's performance has been unsatisfactory since its entry into China in 2006 and some of its shareholders previously demanded the withdrawal from the Chinese market. In 2013, Best Buy withdrew from the European market and sold its 50% stake to its British partner.