Gome axes Hong Kong retail business

Chinese retailer of electrical appliances Gome will exit the Hong Kong retail scene.

The company says it will closed its six stores in Hong Kong from February 1 and shift its focus onto wholesaling instead, reports The South China Morning Post. Gome’s stores in Kwun Tong, Tsuen Wan, Tuen Mun, Tai Po and Yuen Long are scheduled to close on February 1 and its flagship store in Causeway Bay on March 16.

“It is a change of direction of business, from retailing to wholesaling or bulk trade. We hope to take advantage of Hong Kong’s edge in geographical location and commerce and trade to develop our international procurement business,” said the company’s spokesperson in Hong Kong.

The stores’ closures are estimated to affect 100 staff, however the company assured they will be compensated according to the law. Meanwhile, customers can redeem their cash vouchers prior to the closures. The company will also arrange refunds.

The company stressed the move will have no impact on its consolidated operation and financial position.

Gome has struggled against competition from rivals including Suning; it posted a US$110 million net loss in the first three quarters of 2012. However, it says it plans to rebound with new three-year turnaround strategies.



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