Gome sets turnaround plan
Electrical appliance retailer Gome has set a three-year turnaround plan involving bricks and mortar expansion and web store diversification.
Two hundred stores will be deployed across second-tier cities in China beginning next year, says president Wang Junzhou.
The retailer said the product offerings in its web store will be expanded beyond home appliances with the inclusion of other lines such as health and beauty items, food and beverage and baby and mother goods.
Online sales are expected to account 30 per cent of its total sales within three years.
Analysts are skeptical about the turnaround strategy of the retailer. They say it’s too late compared with rivals such as Suning and 360buy.
However, Junzhou is optimistic the plan is a credible roadmap to take the company back to growth.
“This is not only a match to see who runs faster, but also to see who runs longer,” he said.
Struggling with stiff competition in the market, Gome posted a net loss of 687 million yuan (US$110 million) for this year’s first three quarters.