Gome sees profit jump
Chinese electrical appliances and consumer electronics retailer Gome booked a net profit of 322 million yuan ($52.6 million) during the six months to June.
The retailer says that’s up 153 per cent from a year ago.
Sales rose 10.2 per cent to 27.1 billion yuan as its ‘multi-channel retailer’ strategy has now started bearing fruit.
“The group’s sales revenue, operating cost, net profit and single store performance all showed significant year-on-year improvement and consolidated gross profit margin has reached a record year-on-year high,” said CEO Wang Junzhou.
However, Gome’s e-commerce business, which accounted for five to six per cent of the company’s total revenue, has yet to turn to profit as it lost 120 million yuan in the first half. But it is optimistic about its long-term potential.
“Our priority for e-commerce at the moment is profitability, not quantity. We are actively cutting costs and raising money. Hopefully we can see the service make money in at least one month this year,” said CFO Fang Wei.
Gome opened 35 stores and closed 70 during the period, bringing the total number of stores to 1073.
It expects to open stores in 30 to 50 new cities by 2016.
“We firmly believe that the Chinese home appliances market still holds immense potential and Gome still has significant room for growth,” said Junzhou.