Based in China, GOME Electrical Appliances is a top electronics retailer. However, the firm has been under a cloud lately. After all, GOME's founder, Huang Guangyu, is under investigation for alleged financial fraud.

But, such things aren't a deterrent for Bain Capital. As expected, this private equity operator announced a deal to buy about $233 million in convertible bonds in GOME. What's more, the retailer plans to sell $214 million in shares, with a discount of 40%.

Bloomberg reports that Gome Electrical Appliances Holdings Ltd. may sell up to 20% of the company to Bain Capital LLC. The asking price is said to be approximately $500 million. The other companies competing for the piece of Gome are KKR & Co. (NYSE: KFN) and Warburg Pincus.

Gome is the second-largest electronics retailer in China, with more than 800 stores in over 160 cities. So it makes a nice target for investors looking for alternatives to recession-constrained businesses in the United States, Europe and developed markets in Asia.

The Wall Street Journal [subscription required] reports that Dell Inc. (NASDAQ: DELL) intends to sell desktops and notebooks in China through Chinese retailer, Gome Group, whose 1,000 stores in 168 Chinese cities will help Dell expand its presence in the world's second-largest PC market by shipments.

Dell, which stumbled in this decade by missing a market shift away from corporate -- which liked its direct selling strategy -- and towards individual PC purchases, is trying to regain its lead with the return of its founder Michael Dell to the CEO slot. But in China, Dell is number four behind Lenovo Group Ltd and Hewlett Packard Co. (NYSE: HPQ) -- deriving $6.6 billion of its revenues, 12% of its 2006 total, from sales in Asia Pacific and Japan.

Dell's deal with Gome Group will give it a chance to sell to individual Chinese buyers, who like to try out a PC in a store before buying it. And with revenues growing at 25%, the Chinese market is certainly big and getting bigger. But Dell did not say how much of each PC sales dollar it will share with Gome Group. If Dell matched HP's 4.8% PC net profit margin, it could add $48 million to its bottom line for every $1 billion of additional revenue through Gomes.

That's nothing to sneeze at, but it represents a mere 1.7% of Dell's most recent 12-months net income of $2.8 billion in net income.

Peter Cohan is president of Peter S. Cohan & Associates,. He also teaches management at Babson College and edits The Cohan Letter. He has has no financial interest in Dell, Lenovo, or Hewlett Packard.

According to The Wall Street Journal (subscription required), Dell (NASDAQ: DELL) has set up a partnership with Gome, the largest electronics retailer in China.

Gome has 1,000 stores in 168 cities. Dell has had only modest market share in China, behind HP (NYSE: HPQ), Leveno, and Acer. This is primarily due to its lace of retail distribution.

The WSJ adds "China's PC market is expected to sustain annual growth of 25% in the coming three to five years, according to IDC's estimates."

Douglas A. McIntyre is a partner at 24/7 Wall St.