900 days after Huang Guangyu's "return", Gome Retail (00493) ushered in the most difficult and darkest moment in history. Revenue plummeted by more than 96% year-on-year, the stock price was HK$0.053, and the market value was only 2.579 billion Hong Kong stocks.
On August 31, 2023, Gome Retail released its financial report for the first half of 2023. During the reporting period, the company achieved revenue of 415 million yuan, a year-on-year decrease of 96.57%. The loss attributable to the owners of the parent company was as high as 3.529 billion yuan, with a loss of 8.2 cents per share.
This performance can be described as dismal. Compared with the same period last year, Gome Retail's revenue was almost "annihilated." In fact, since the profit warning was issued on August 18, 2023, the market has been pessimistic about the performance of Gome Retail. The announcement of this financial report further confirms the difficulties that Gome Retail will encounter in the first half of 2023.
The plight of Gome Retail is mainly due to the decline in market demand and the adjustment of the company's business strategy. On the one hand, affected by the e-commerce industry, consumers' demand for physical stores has been greatly reduced, and the proportion of online shopping has gradually increased. This makes Gome retail, which mainly sells offline, face a huge impact. On the other hand, Gome Retail has also tried online sales in recent years, but it has not yet formed enough scale and influence to offset the decline in offline sales.
Huang Guangyu's return is not surprising
Previously, after the founder Huang Guangyu returned to Gome Retail, he quickly launched a series of strategic layout and adjustments, aiming to revive the company's glory. The market once believed that the return of Huang Guangyu is expected to mark that Gome Retail is about to enter a new stage of development, and it has also brought new variables to the entire industry.
In fact, after Huang Guangyu returned, he did make drastic reforms to the organizational structure of Gome Retail. He reorganized the management, promoted a group of young and potential cadres, and dismissed some old departments that did not adapt to the new strategy. A series of personnel adjustments shows Huang Guangyu's expectations for the future of Gome retail, and also indicates that the next changes will be more violent.
It is worth mentioning that while adjusting the organizational structure, Huang Guangyu also led a series of business integration and cooperation. Gome Retail has reached a strategic cooperation with the Internet home improvement platform "Dressing Home" to jointly create a full industrial chain service for home improvement; it has reached an in-depth strategic cooperation with Pinduoduo to realize resource sharing and complementary advantages between the two parties. In addition, Gome Retail also holds 80% of the shares of the Internet home improvement platform "Dress Up Home" through its subsidiaries, increasing the home improvement market and diverting sales of home appliances.
Another important strategic layout of Gome Retail is online sales. After Huang Guangyu returned, he led the upgrade of the original Gome APP and launched the "True Happiness" APP. This APP not only provides sales of home appliances and digital products, home life, food and drinks, but also introduces interactive gameplay such as competitions, rankings, and live broadcasts. fusion.
Caiwen.com also learned that in addition to making changes in sales channels, Huang Guangyu is also actively promoting the upgrade of Gome Retail in terms of supply chain and logistics. He led a series of supply chain optimization and logistics warehousing layout, improving the efficiency and competitiveness of Gome Retail in supply chain management and logistics distribution.
The market is full of expectations for Gome Retail after Huang Guangyu's return. Some analysts believe that under the leadership of Huang Guangyu, Gome Retail is expected to achieve a significant improvement in performance and a comprehensive business recovery. However, the competitive pressure faced by Gome Retail should not be underestimated.
Currently, giants such as JD.com and Alibaba have taken the lead in the field of home appliance retailing, while other emerging e-commerce platforms are also rising rapidly. In addition, as consumers' shopping habits change, more and more people choose to purchase home appliances on e-commerce platforms, which also brings huge challenges to traditional home appliance retailers.
Business difficulties continue to intensify
Behind Gome Retail's worrying financial report, it also directly reflects that its operating conditions are facing severe difficulties. Not only has sales revenue fallen sharply, funds have also been frozen, and stock prices have also plummeted. The company is facing severe operational challenges.
Caiwen.com learned that, in addition to the deterioration of operating conditions, Gome Retail is also facing the problem of freezing funds. According to reports, some funds of Gome Retail Group have been frozen, totaling about 197 million yuan. This restricts the company's liquidity, which may affect the company's daily operations and future development. In addition, the stock price of Gome Retail has also plummeted recently, causing huge losses to investors.
Regarding the plight of Gome Retail, some analysts believe that the company's business model and strategy may need to be adjusted. In the Internet age, consumers' shopping habits have undergone tremendous changes. For traditional retailers, it is necessary to adapt to this change and take effective measures to attract and retain customers. In addition, Gome Retail also needs to solve its debt problem and improve its operating conditions to restore market confidence in it.
For investors, the slump in Gome Retail's share price could mean that investing in the company is riskier. Therefore, investors need to be cautious about the investment in Gome Retail, and pay close attention to the company's operating conditions and development trends. In general, Gome Retail is facing severe operational challenges and financial pressure.