US based electricals retailer Best Buy is to close 11 stores in Turkey and China as part of a major restructuring plan, it was announced yesterday.
Both of the Best Buy-branded stores located in Turkey will disappear, ending its operations in the country, and nine branded outlets in China will also close although two may re-open at a later date.
Best Buy will consolidate its Chinese-based business into its Five Star brand which has been performing well and in the US further expansion of its Best Buy Mobile stores has been confirmed.
Brian Dunn, CEO of Best Buy, commented: “We’re pleased to continue our investments in the Best Buy Mobile and Five Star business models, which are profitable and have significant growth opportunities.”
“The actions we are taking are consistent with our strategy of driving businesses that have earned the right to additional capital while curtailing activities that we believe will not meet our return on investment thresholds.”
Along with supply chain improvements in the US market, the changes are estimated to result in annual pre-tax net savings of $60 million (£37 million) to $70 million once fully realized in fiscal 2013.
Further expansion plans include opening around 18 Best Buy-branded large-format stores in Canada, United Kingdom and Mexico during 2012.
The retailer’s ambitions in the UK were questioned in December when it emerged that a planned store for Gateshead had been cancelled, but it responded by reiterating its desire to increase its properties in the country.
Earlier this month saw the replacement of Scott Wheway as CEO of Best Buy Europe with Andrew Harrison, and then the departure of two directors at Best Buy UK.