/ Asahi/August 22, 2022 Guangzhou - Gome Retail and Huang Guangyu, once again become the focus of the retail industry and capital circle.
On August 19, Gome Retail, a listed company in Hong Kong, announced that it would restructure its business sectors and focus on the retail of electrical appliances and consumer electronics products. Non-related or loss-making businesses would be separated from the listed company, sold or stopped developing.
At the same time of business focus and light loading, Gome retail also needs to optimize its asset structure to supplement "ammunition" for long-term development. Under the condition of not diluting the rights and interests of minority shareholders and not increasing the cash flow pressure of listed companies, Gome Shangdu and Xiangjiang Jiuno will be acquired by acquiring the property rights of Gome Shangdu and Xiangjiang Jiuno, and acquiring part of the shares of Anxun Logistics to obtain the control rights.
In the context of the long-term disturbance of the epidemic, Gome's business is inevitably affected and impacted. In order to overcome temporary difficulties and long-term development, Huang Guangyu has made a pragmatic move to focus on Gome's retail business and inject assets, to fight the battle of long-termism in the retail world.
At the execution level, the management team of Gome Retail stripped off non-focused businesses to reduce losses. At the same time, it focused on promoting the "separation of exhibition and sales" mode, integrated the advantages of Gome's offline stores with those of its supply chain, greatly optimized financial indicators, and formed Gome's unique competitiveness in the field of home appliance retail.
Gome estimates that the loss of the non-focused business is above 2 billion. On the inefficient stores closed, the loss of the stores is expected to be reduced by 1 billion to 1.5 billion yuan.
At the same time, the display position will become a long-term source of value for Gome's retail, which can continuously generate revenue, similar to the commercial recommendation of e-commerce brand. The important thing is that the "show-and-sell separation" model consumes very little cash flow and continues to generate cash flow.
That means Gome has done a series of things to reduce losses and increase cash flow to increase profitability. According to the disclosure, this round of adjustment is expected to be completed by the end of September, the latest October.
For the future, Huang Guangyu proposed a three-year strategic development goal of "1+1+1" : to achieve a higher profit in 2023 and reach the previous high level, reach the historical best level in 2024, and obviously surpass the historical best level in 2025.
"Do the right thing, do the right thing", Huang Guangyu believes Gome will be better in the future.
Light, Gome retail strategic focus
"Records of The Three Kingdoms", Cao Cao Li raid Wuheng king, military adviser Guo Jia advice: "a powerful speed". Therefore, Cao Cao abandoned the grain and baggage, advanced lightly, and finally won a great victory.
"Home · life" is a huge racetrack of 30 trillion yuan. Shopping malls are like battlefields. Under the disturbance of the epidemic, Gome retailers · life "strategy wants to push forward smoothly, but also needs to pack lightly and put down the burden. In the words of Gome's retail announcement, it is called "open source and reduce expenditure, reduce complexity and simplify, and focus on core business".
In light, Gome retail business focused on electrical appliances, consumer electronics retail, Five main profit models have been formed: exhibition (offline boutique experience), distribution (online and offline all-channel self-management + sharing supply chain), integrated solutions of home electronics products, extended products of pan-household appliances and value-added services (delivery, after-sales, extended warranty, paid member operation, etc.).
In terms of putting down burdens, Gome retail will divest, sell or stop the development of non-related or loss-making businesses with the main business; In addition, Gome Retail will also close inefficient stores, open new large and good stores, expand franchised stores, comprehensive optimization of the national store network layout.
In order to further improve the competitiveness of the core business, Huang Guangyu gave Gome retail a "big tonic pill" : under the premise of not diluting the rights and interests of minority shareholders and not increasing the cash pressure of the listed company, the two property rights of Gome Shangdu and Xiangjiang Jiu were injected into the listed company at a substantially preferential price.
According to the announcement, Gome is located in Beijing Fengtai Science Park, a total area of 524,000 square meters of property, including an 8-story shopping mall and related catering, entertainment and supporting facilities; Located on Changsha's Riverside Landscape Road, Xiangjiang Jiu covers a total area of 130,500 square meters, including a six-story shopping mall and related dining, entertainment and supporting facilities.
From the perspective of regional location, Gome Commercial Capital and Nine Xiangjiang are located in the core business circle of Beijing and Changsha respectively, with obvious geographical advantages. At the business level, the two assets can provide strong support for building new offline stores. At the capital level, the asset adequacy ratio of listed companies can be greatly optimized and the financing ability can be increased.
In the new era of full retail ecology, logistics is a key link of "threading the needle". In order to improve the profitability of Gome's retail specialization in pre-sale, in-sale and after-sale full service closed-loop and value-added services, Huang Guangyu also plans to inject the control right of Acon Logistics into the listed company at a substantially preferential price.
The main business of Anxun Logistics includes precision delivery, synchronization of delivery and loading, warehousing integration and other characteristic services, which has obvious advantages in the medium and large goods storage system. It now covers 31 provinces, autonomous regions and municipalities directly under the Central government, more than 400 large and medium-sized cities, more than 2,800 districts and counties, and more than 45,000 towns and townships in mainland China.In terms of revenue, Gome expects Acon Logistics to maintain double-digit year-on-year revenue growth and continue to achieve profitability; It is expected that the revenue will maintain an average growth rate of 20%-40% in the next five years, and the net profit will maintain a year-on-year growth rate.
Both property rights and partial shares of Anxun Logistics are accelerators of Gome's retail "home · life" strategy. Huang Guangyu injected high-quality assets into the listed company at a low price, highlighting the confidence in the future of Gome retail.
Do the right thing, Huang Guangyu believes in the future
In 1987, Gome Electrical appliances opened in Beijing Zhushikou Street, started from home appliance retail, through a standardized, replicable chain business model, created a precedent in China's home appliance chain business, become a banner in the retail industry.
As the pioneer of household appliance chain sales, Gome has helped the growth and rise of a series of Chinese national household appliance brands in the household appliance industry because of the opening of sales channels. In terms of user service, the convenience and transparency of the channels have brought down the price of household appliances and brought more high-quality household appliances into ordinary households.
The employment generated by Gome's more than 4,000 offline stores makes the company inseparable from the society.
Reviewing 36 years of successful experience, that is, Gome retail adhere to "the right thing, do the right thing". In 2021, Gome Retail established the implementation path of the second stage of "Home · Life", and clearly proposed the strategic goal of full retail ecological sharing with full scene, full link, full business, full mode and full sharing.
Looking at the new trend of consumption upgrading in China, as well as the quality, personalized and diversified consumption demands of hundreds of millions of families, Huang Guangyu believes that there is great potential in the field of "home and life". He proposed to "strive to use the next 18 months to restore the original market position of Gome", to encourage the Gome team.
The real environment is cruel. The epidemic not only hit the offline retail industry, but also temporarily blocked the strategic promotion of Gome's retail. Huang said it took Gome more than two years to set up the infrastructure for the entire retail ecosystem, which was delayed by about a year because of the long-term impact of the epidemic.
Although the plan has been delayed, Gome's retail team has still made great achievements and progress, such as new mode stores, shared supply chain platform, entertainment marketing and so on.
Huang Guangyu is still confident about the construction of the national unified big market, "We plan to use the" 1+1+1 "three years in three steps to promote the more complete implementation of this model, hope to see its flowering and fruit with your care and support."
Objectively speaking, Huang Guangyu, as a major shareholder, injected high-quality assets this time. He and small and medium-sized investors have the same interest demands, that is, Gome retail can become better. So Mr Huang pushed his management team to make a bet on performance: higher earnings in 2023 and at previous high levels, an all-time best in 2024 and a clear beat in 2025.
Gome retail to formulate the "home · life" strategy, promote the whole retail ecology to build infrastructure, comply with the policy requirements, in line with the general trend of Chinese household consumption upgrading, it is Huang Guangyu said "the right thing".
The latest news, Gome retail "home · life" strategy continues to make good progress. Exhibition and sales separation is expected to become one of the core competitiveness of Gome in the field of home appliance retail.
On August 18, Gome's new mode store officially opened in Fujian, Chongqing and Hubei, becoming a popular entertainment shopping spot for local people. Before August 12, Gome retail following Tencent, Huawei, and Ali Cloud reached cooperation, to promote the number of physical retail intelligence to deepen the landing.
For the future, Huang Guangyu said, "because I believe in and work hard, because I believe in and persist. As an enterprise operator, I have confidence and dreams for the future, and hope to do better than our premise."
Facing the uncertainty of the future, the operator of the enterprise should have the sense of crisis, but also have the enterprising mentality. Retail is a marathon without end, Gome retail and Huang Guangyu, to fight is a long-termism battle, success or failure lies in long-term endurance, as long as steady, there is a chance to win.
