Former China Rich List No. 1’s Gome Retail Posts Another Big Loss

Then-billionaire Beijing retail entrepreneur Wong Kwong Yu was riding high 15 years ago. Wong topped the Forbes China Rich List in 2006 with a fortune worth $2.3 billion on the strength of Hong Kong-listed flagship retail chain he founded, Gome Electrical Appliances Holding, now called Gome Retail Holdings.

In 2010, however, Wong was sentenced to prison for 14 years for insider trading and other offenses. That setback happened at around the same time e-commerce businesses like JD.com and Alibaba were accelerating the digitalization of the country’s retail landscape. The fusion of social media and e-commerce at business such Xiaohongshu has only deepened pressure on the old guard and retailers in general.

Though Wong was out on parole in 2020, pressure on the company hasn’t eased. Gome on Wednesday reported a loss of 4.4 billion yuan, $687 million, in 2021, following another big loss of 6.99 billion yuan in 2020. Sales last year edged up to 46.4 billion yuan from 44.1 billion yuan a year earlier.

The results have been tough on Gome’s shares, which have lost 67% in the past year. Older rival Suning.com’s shares have fallen by half during the period.

Wong, who is no longer a billionaire on the Forbes Real-Time Billionaires list, is also known as Huang Guangyu.

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@rflanerychina