Business Intelligence on Retailing, Franchising, and Consumerism in China

Gome To Close Badly Managed Stores In Guangzhou

According to Gao Jiqun, general manager for Gome Guangzhou, to ensure its stable development and profits, Gome Guangzhou will close poorly managed stores in 2009.

Prior to this announcement, Gome's spokesperson He Yangqing said that the number of Gome stores would not be increased this year. The company would shut some unprofitable stores and open new flagship stores while maintaining the total number of its stores unchanged. Gome Guangzhou will reportedly adopt the same policy and will close one store when opening a new one, maintaining the total number of 110 stores in the city.

Gao said the major task for Gome in 2009 is to ensure its market share under a stable management and to maximize profits. Stores with poor locations, high rents, or bad management will be closed. However, the company will open new stores in core business areas which have strategic value to keep the total number of its stores unchanged.

According to reports in local media, Gome had already closed its Tianpingjia store in Guangzhou at the end of December 2008 and another store located at the suburbs of the city will be closed at the end of February 2009.

In addition, Gome will enhance cooperation with suppliers in 2009. Gao said Gome Guangzhou has achieved in-depth cooperation with China Mobile to launch mobile phone terminal promotions such as buying mobile phones at the price of CNY1 per handset.

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