Best Buy to close stores in China and Turkey

Best Buy is to close its stores in China and Turkey and focus on smaller stores in the US as part of an attempt to generate savings of up to $70m at the US electronics giant.

The US-based group, which has a joint venture in the UK withCarphone Warehouse, said that its new store openings next year will focus primarily on its smartphone selling Best Buy Mobile stores in the United States and its Five Star business in China.

However, it is also looking to open about 18 Best Buy-branded large-format stores in the UK, Canada and Mexico in 2012. But the company plans to open only between six and eight Best Buy stores in the US, as it reins back its annual expansion from 5 per cent over recent years to closer to 1 per cent.

Instead, the company will open about 150 stand-alone Best Buy Mobile stores in the US, taking its total to 325.

Along with changes to its US supply chain operations, Best Buy expects to incur restructuring charges during 2011 and 2012 of $225m to $245m.

The bulk of the charges will be reported in the fourth quarter of fiscal 2011, with the balance of the charges reported in 2012, the company said.

In China, Best Buy will focus on its Five Star branded stores and open 40 to 50 locations in growing markets, giving it about 210 stores at the end of 2012. "Five Star has been a profitable business model in the large and fast growing consumer electronics market in China. The company believes that Five Star provides Best Buy with an excellent strategic growth option in the important China marketplace," the company said.