Gome’s profit falls
Chinese home appliance retailer Gome Electrical Appliances is poised to further expand this year despite a profit decline last year.
While Gome achieved a sales increase of 17.5 per cent to 59.82 billion yuan (US$9.50 billion) last year, it reported a net profit decline of 6.2 per cent after its earnings of 1.96 billion yuan (US$310.89 million) in 2010 plunged to 1.84 billion yuan (US$291.86 million) last year.
It blamed the fall on high capital expenditure required for investing in new IT equipment, refurbishing existing stores and setting up new shops.
Looking ahead, Gome, this year, will add 250 to 260 new stores across the mainland to its current 1079 stores.
“The group will adopt an operational strategy which emphasises on both store network expansion and same-store growth”, said chairman Zhang Dazhong.
Gome will position e-commerce as key area of its development, adding dangdang.com as its online portal for selling products, added to its two operated shopping e-commerce platform gome.com and coo8.com.
Meanwhile, Gome’s rival Suning posted a 93.8 billion yuan (US$14.88 billion) revenue last year, 1.6 times higher than Gome’s revenue.