SHANGHAI - US consumer electronics retailer Best Buy Co Inc has closed all nine outlets on the Chinese mainland, plus its regional retail headquarters in Shanghai, a statement on the company's website said Tuesday.
It said Best Buy's China business would be merged into its wholly-owned subsidiary, Jiangsu Five Star Appliance Company, based in Nanjing, capital of east China's Jiangsu province.
Kal Patel, president of Best Buy's business in Asia, said in the statement it had been a very hard decision to make, but the company was confident of its business strategy.
Patel said Best Buy would continue to serve Chinese consumers by further expanding Jiangsu Five Star to meet the growing demand from China's retail market.
Five Star would open 40 to 50 new stores in the 2012 fiscal year, he said.
Meanwhile, Best Buy would offer its employees job opportunities at Five Star and would retain some of the team for further business development in China, he said.
The statement said all laid-off employees would receive cash compensation and be recommended for new posts, but did not say how many would be laid off.
It said four of its stores, in Shanghai, Suzhou and Hangzhou, would reopen for a month from Feb 24 to March 24 to handle consumer claims for replacements or refunds.
Best Buy's headquarters announced on Monday it would close its branded stores in China and Turkey as part of an effort to generate savings of up to $70 million by the 2013 fiscal year.
Best Buy took a controlling stake in Jiangsu Five Star in 2006 for about $180 million and bought it out completely in 2008.
Five Star is China's third largest electronics retailer with almost 170 stores.