From Best buyer to Best seller?

Best Buy Co, the US-headquartered consumer electronics retailer, is considering selling its Chinese business in order to focus more on its core US marketplace, according to reports today.  Naturally no one from Best Buy will comment on this current speculation, but the evidence would suggest that it’s not unrealistic to assume that the deal is being given serious consideration.  Should this deal proceed then it would be Best Buy’s ninth disposal since mid-2010, contrasting starkly with previous years where Best Buy was on the acquisition trail as opposed to the divestiture path it has been following more recently.

Sales of Best Buy subsidiaries and its minority shareholdings in various companies have raised over USD 1bn and if press reports are to be believed then a value of over USD 300m has already been talked about as a possible price in relation to Five Star and Best Buy Mobile (the operating names of the Chinese business).

The change in strategy, whilst implemented prior to the arrival of the new CEO, Hubert Joly, in August 2012, has accelerated since his arrival with five of the eight prior disposals taking place after Mr Joly’s arrival and in line with his core task of turning the beleaguered electronics retailer around after it faced a drop in sales due to the dramatic increase in competition from online retailers who could offer significantly cheaper prices.