Business / Companies

Gome posts net loss of 687m yuan in first nine months

( Updated: 2012-11-20 17:03

Chinese home appliance retailer Gome Electrical Appliances Holding Ltd recorded a net loss of 687 million yuan ($110 million) for the first nine months of the year, compared with a net profit of 1.79 billion yuan in the same period last year, the company said on Monday.

Gome's sales revenue in the first three quarters was at 36.06 billion, down 18.02 percent from the same time last year.

Although the overall results of the first nine months were disappointing, Gome's strategic transformation showed initial results during the third quarter, and its quarterly net loss narrowed to 186 million yuan from 568 million yuan in the second quarter. Gome's new strategy included a huge investment in advertising and the optimization of its network of stores.

In the just-concluded 2013 China Central Television advertising auction, Gome spent 454 million yuan on multiple prime-time advertising spots for next year.

"We want to take advantage of CCTV's well-established national platform to promote the Gome brand and attract consumers," said He Yangqing, the company's vice-president.

For the first nine months of the year, Gome focused on launching flagship stores and accelerating the optimization of its network. It also closed under-performing stores. As a result, the drop in same-store sales growth narrowed, with a 2.4 percentage points quarter-on-quarter improvement.

Gome is optimistic about its future performance as macroeconomic conditions gradually recover, and is committed to further expanding and optimizing its store network in the second-tier market.

"With the macroeconomic recovery, rebound in consumption, and economic stimulus policies taking effect and increasing supply of social housing, the home appliance industry has emerged from the most challenging period," said Gome Chairman Zhang Dazhong.

China Daily

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