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China’s Gome Retail warns of US$1 billion loss

Chinese omnichannel retailer Gome Retail is citing challenges from the Covid-19 pandemic for a massive projected loss for the December year. 

In a stock-exchange filing, chairman Zhang Da Zhong said based on preliminary information, the company expects to report a loss attributable to shareholders of between US$1 billion and $1.1 billion, including goodwill impairments of up to $390 million. 

In the prior year, the company recorded a loss of $400 million, however it ended 2020 with cash reserves of $1.5 billion. 

Gome Retail operates more than 2800 stores across China, all of which have been moved into an online-offline model as part of a program the company calls “one store, one page”. 

The company’s sales for the December year fell by between 23 per cent and 29 per cent. 

However, Zhong said Gome has now completed its digital transformation and upgrading, and has built an online and offline dual-platform model with more than 200 million members across China, giving it a unique position compared with rivals. 

“In the future, the group will continue to comprehensively promote the second phase of the Home•Living strategy, open up the rich resources on the platform, strengthen online and offline operations, and meet consumers’ desire for a better lifestyle with innovative changes in technology, openness, entertainment and sharing, and utilising scenarios and technology to become a redefined digital, social, and entertainment local retail service platform,” he said.

Final results are scheduled to be released at the end of the month. 

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