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Best Buy Picks Site Of First China Store

4/06/2006 07:58:00 AM Eastern

Shanghai, China — Best Buy said it plans to open China’s first Best Buy-branded in the Xu Jia Hui commercial area of Shanghai, the city’s premier shopping district. The 86,000-square-foot store will occupy four floors of the Jiang Shan Building, and is expected to open later this year.

“China represents an exciting market for Best Buy,” said Al Lenzmeier, Best Buy’s vice chairman. “With our first flagship store in Shanghai, we hope to enter the market in a way that enables us to learn about China’s diverse consumers. Local business leaders, with keen customer insights, will be hired to manage the store. We believe that this venture will become an important part of our strategy to develop controlled growth opportunities internationally.”

“We warmly welcome their investment decision and are very honored to be working with them,” said Sun Feizhong, vice governor of Shanghai’s Xuhui District. “We think that the soon-to-open flagship store will add diversity and options for electrical products and service to the residents of Shanghai.”

Best Buy projects total CE sales to reach $85 billion in China this year, and to grow at a double-digit pace for the next decade. The retailer presently operates three Chinese sourcing offices, in Shanghai, Beijing and Shenzhen, and has “well-established relationships with manufacturers that are seeking to gain broader distribution in both China and North America,” the company said.

“We view a ‘greenfielding’ strategy” — or growing by opening new stores — “as an opportunity for profitable growth in this market,” said Weimin Lu, chairman and general manager of Best Buy China. “As Best Buy learns more about serving the Chinese consumer, we also expect to consider strategic investments of a manageable size in China.”

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