PHILADELPHIA Consumer electronics retailer Best Buy Co Inc (BBY.N) said 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 fiscal 2013.
The company said that its fiscal 2012 new store openings will focus primarily on the profitable growth of its Best Buy Mobile business in the United States and its Five Star business in China.
Along with changes to its U.S. supply chain operations, Best Buy expects to incur restructuring charges during fiscal 2011 and 2012 of $225 million to $245 million.
The bulk of the charges will be reported in the fourth quarter of fiscal 2011, with the balance of the charges reported in 2012, the company said.
The retailer said it continues to expect fiscal 2011 diluted earnings of $3.20 to $3.40 a share, excluding restructuring charges.
The company also announced new store plans for the 2012 fiscal year, which included plans to open about 150 Best Buy Mobile small-format, stand-alone-stores in the U.S. The opening would take the total Best Buy Mobile stand-alone-stores to about 325 in the United States by the end of fiscal 2012.
In large-format stores, the company plans to open about six to eight Best Buy branded stores in the United States, resulting in square footage growth of less than 1 percent. That is less than the average square footage growth rate of 5 percent during the last three years, the company said.
The company also plans to open a total of about 18 Best Buy-branded large-format stores in Canada, the United Kingdom and Mexico during fiscal 2012.
In China, Best Buy will focus on its Five Star branded stores and open 40 to 50 locations in growing markets in fiscal 2012. These openings would take the total Five Star stores to about 210 at the end of fiscal 2012.
"Five Star has been a profitable business model in the large and fast growing consumer electronics market in China. The company believes that Five Star provides Best Buy with an excellent strategic growth option in the important China marketplace," the company said.
(Reporting by Jessica Hall: Editing by Jan Paschal and Dhara Ranasinghe)