Gadgets & Electronics

Best Buy Gains Approval To Open Four New Stores In China

According to the second quarter financial report in 2009 fiscal year of the international electronics retailer Best Buy (BBY), the company has gained the approval of Chinese local government to open four new stores in China.

The report, which shows the company's performance from June 1, 2008 to August 30, 2008, says that the company achieved revenue of USD1.668 billion in its international business over the period, a year-on-year increase of 10.03%. In the Chinese market, its revenue declined because of the effect of earthquake and sliding stocks. However, the company opened its second store in China at the end of the second quarter. In addition, it confirms that the company has gained the approval of the Chinese government to open four new stores, which are expected to be opened in the next six months. The report does not mention the uphill battle Best Buy must still face as it tries to fight dominant Chinese digital retailers like Suning, Gome, and Dazhong.

Bob Willett, CEO and CIO of Best Buy International, says that the Chinese stock market has a great influence on its retail sales and the drop of stock index led to the decline of Best Buy's sales in China. The company hopes that China reconstruction efforts will stimulate consumption and help to increase the sales of its stores in next quarter. This seems like a poor excuse, as the company only had one retail outlet in China during the earthquake and that store was located in Shanghai.

Over the last 12 months, Best Buy opened 160 new stores and shut down four unprofitable stores around the world. At the same time, the company expressed intentions to increase its investment in the Chinese market while accelerating its developments in other overseas markets, including Mexico, Turkey and the Europe.

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