Best Buy namesake store closes in China mid May

(Ecns.cn)--Minnesota-based Best Buy will close its 42 namesake stores in China by May 12, 2012 as part of the company's restructuring move, according to the Economic Information Daily Tuesday.

Two stores have already closed their doors, and according to the report, six others are set to shut down soon. On the home front the company is also shifting away from its familiar big box style to smaller formats for new US store growth.

Although the company did not say that it is leaving the Chinese market completely, "it is apparent that the electronics giant will not come back any time soon," said an industry insider.

In 2011, the company made the difficult decision to shutter its nine Best Buy branded locations in China, which had been struggling, as have its similar big-box stores in the US market. The retailer is also exiting the Turkey market, where it just began retail operations.

Meanwhile, Best Buy has shifted its focus in China to growing operations under another retail format called Five Star. That model has proven more successful, but there are concerns that if the company cannot turn the situation around, Five Star's performance will also be crippled.

Failing to compete on price point in urban locations where potential customers vote with their feet, and applying American-style attitudes about service to the Chinese market, may be reasons why the company failed in China, wrote Adam Minter, an American journalist who covers China for the western press.