Too sudden! All closed and closed!

On October 17th, the reporter learned from at least two South China home appliance suppliers that Gome's stores in Guangdong have all been closed.Due to overdue payments and unpaid wages, many stores have closed

On October 17th, the reporter learned from at least two South China home appliance suppliers that Gome's stores in Guangdong have all been closed.

Due to overdue payments and unpaid wages, many stores have closed. According to reporters, there has been no progress in repaying the payments owed by Gome Electric to various suppliers in the early stage. A supplier told reporters, 'I haven't heard of any repayment yet.'. Previously, Gome Electric had only one store operating in Guangdong Province, located in Dongpu, Tianhe District, Guangzhou. This store has recently entered a state of closure. A Guangzhou South China home appliance supplier told reporters that Gome is still in arrears with their payment, and customers of Gome's self operated business and regional shared construction have all been in arrears. Currently, their recovery of payment from Gome is at a standstill. Not only did Gome default on wages and payments, but it also failed to pay some property management fees, leading to property management lawsuits. Some local courts have closed down Gome stores, resulting in some manufacturers not being able to retrieve their TVs, refrigerators, and other prototypes, and can only calculate bad debt losses, "the person said. An industry insider close to Gome told reporters that some regional branches of Gome have not been paying salaries since November last year.

Some regional branches have been paying salaries normally until January of this year, but they have not since. Currently, there are very few employees left within Gome, and most of them are also handling litigation and arbitration affairs in the company. According to Upstream News, reporters have contacted multiple individuals who reported that Gome has defaulted on wages. As of press release, no specific response has been received. According to enterprise investigation data, there are currently over a hundred pieces of information on executed individuals at Gome Electric Co., Ltd., with a total amount of over 2 billion yuan executed. In addition, there are also multiple consumer restriction orders, dishonest executed individuals, and information on the final case. Due to poor management, in recent years, there have been rumors of Gome being enforced, underpaid, reduced holdings through shareholder clearance, and even bankruptcy liquidation.

Last November, Gome Electric requested employees to sign a commitment letter, which may delay salary payments for the next six months to a year. Last year, GOME Retail (00493. HK), the parent company of GOME Electric Appliances, raised a total of HKD 770 million in additional financing to repay its debts, issued a notice on October 6th to further supplement the 2022 annual report. In May 2022, Gome Retail placed 1.9625 billion shares of common stock with no less than six independent placees at a placement price of HKD 0.4 per share, raising approximately HKD 776 million. The original plan was to use 60% of the proceeds to expand online and offline platform business, 10% to repay debts, and 30% to general capital. Due to the further deterioration of the liquidity problem of Gome Retail since the second half of 2022, the proceeds were not used as originally planned and had been fully used to repay debts by the end of 2022.

According to the 2023 semi annual report released by Gome Retail in September, the revenue of Gome Retail in the first half of 2023 was 4147.6 million yuan, a decrease of over 96% compared to the revenue of 12.1 billion yuan in the first half of 2022; The gross profit loss was approximately 120 million yuan, compared to a gross profit of 2.088 billion yuan in the same period last year; The net profit loss attributable to the parent company was 3.539 billion yuan, an increase from the net profit loss attributable to the parent company in the same period last year (2.966 billion yuan).

Source: News Broad Corner

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