Best Buy (BBY +1.8%) finds a bright spot in China, where its Five Star subsidiary has set a...

This news story has 1 comment:

Register or Login to rate comments »

Seeking Beta To Your Alpha Comments (445)
 
This story has been carried by numerous outlets as a "bright spot" for BBY. Nothing in the WSJ story supports that proposition. The facts in the story simply note that China has a large and growing middle class, that BBY fell on its face when it first opened, BBY decided to leverage "5 Star" as a brand, and wants to open up more stores.

The facts in the story tend to actually show that BBY isn't going to be able to gain more ground in China. Note the following quotes from the WSJ story:

1. "Five Star declines to disclose last year's sales."
2. "When it learned that some customers considered the chain stodgy, Five Star developed a new icon: cartoon characters that appear to be drawn by Hollywood animators."
3. ""We were stupid and arrogant," says David Deno, who was Best Buy's Asia chief until recently." (Interestingly David Deno left to join a company that owns Outback steakhouses).

I'm surprised that SA would reproduce the story without fixing the headline. The headline should read, "BBY expanding 5 Star brand in China, and hopes to increase prior dismal sales and stodgy image of the poor brand hat BBY mistakenly purchased when it entered into the Middle Kingdom."
16 Jun 2012, 01:49 AM Reply Like