Best Buy announced Thursday that it has decided to sell its Five Star business in China to native real estate firm Jiayuan Group.
The sale of Five Star, which has 184 stores in China, will not affect Best Buy's private-labeled operations with Dynex, Insignia, Modal, Platinum, Rocketfish and other brands in the country, according to the Minneapolis Star Tribune.
The Redfield, Minn.-based company said it doesn't expect the deal "to have a material impact on the results of operations, financial position or cash flow" of its business.
Hubert Joly, president and CEO of Best Buy, said the company spent the last two years working to improve its business in China, and that the Jiayuan Group recently offered to buy the business in order to make it bigger, Businessweek reported. He added that Five Star COO Yiqing Pan will become Five Star's new CEO.
"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.
Joly said the sale of Five Star doesn't suggest Best Buy will do the same for its stores in Mexico and Canada, adding that the move will help the company focus more on its business in North America.
Best Buy has been operating its stores in China under the Five Star brand ever since it entered the Chinese retail market in 2006 with its purchase of a major interest in Jiangsu Five Star.
The new deal is subject to regulatory approval, and Best Buy and the Jiayuan Group expect it to close in the first quarter of fiscal 2016.
