Gome Retail has plunged US$64million into the red as its restructuring program takes its toll.
The company took the unusual step of releasing third-quarter financial data, which shows group sales were down 11.2 per cent in the first nine months of the year, to $7.3 billion.
Total gross merchandise volume (GMV) of the group for both online and offline grew by 4.83 per cent year on year, with its e-commerce business growing by 26.04 per cent.
Gome’s consolidated gross profit margin was 18.06 per cent, up by one percentage point compared with the same time last year.
But the loss for the period contrasted with a $31.7 million profit last year.
Gome issued a profit warning early this month, with the actual figure turning out to be at the top end of its projected range. While yesterday’s statement did not include any commentary, the company has made considerable effort to keep shareholders aware of the scale of the task it faces and the short-term pain required to effect the restructuring plan.
Gome Retail is integrating its online and offline business and promoting a new ‘Social + Business + Sharing’ shared retail model. As part of that strategy, the company is combining its electrical appliances, home decoration, household systems and supermarkets to create sizable “experiential stores” in tier 1 and 2 cities. The group is also optimising its platform to include the Xiaomei Net Cafe, VR Cinemas and Gome esports.