Chinese consumer electronics retailer Gome has posted a net loss of 597 million yuan (US$96 million) for 2012 – far lower than the 1.84 billion yuan loss of the previous year.

Sales revenue was down 20 per cent to 47.8 billion yuan. The fourth quarter saw a gradual rebound in gross and net profit, it said. Net profit in the quarter turned around to record a profit of 90 million yuan, contributing to reduced losses for the full year.

During the period, Gome opened 107 new stores and closed 137 existing stores, taking its total number to 1049.

“In 2012, China’s traditional retail industry faced many challenges. China’s economy switched gear from a high-growth mode to a lower-growth phase, which led to more rational consumer demand, while the meteoric rise of e-commerce curtailed the growth of physical stores,” said CEO Wang Junzhou.

The company says its three-year strategic plan would make it become a multi-channel retailer with its business driven by consumer demand, representing the way ahead for profitable growth in the next three, or even five to 10 years.

“With China’s e-commerce industry at a stage of development where it is driven by unprofitable practices, the group is committed to finding a business model that delivers healthy, sustainable profits,” says Junzhou.

However, the CEO said physical stores will remain a core business of the group.