Gome To Raise US$800 Million For Expansion

Electronics retailer Gome plans to raise US$800 million as part of efforts to consolidate its position in the Chinese market.

This is the first large scale fund raising for Gome since its merger with Yongle last year. Chen Xiao, president of Gome, says that they will use all funds raised to upgrade their software and hardware facilities to further increase their core competitiveness.

In particular, most of the money will be spent on improving the settlement conditions with suppliers, boosting their profit-making capacities and competitiveness. The rest will be used to build regional logistics centers, upgrade the existing ERP system, acquire some stores and renovate the current stores.

Benefited from the acquisition of Yongle, Gome's net profit in the first quarter of this year soared to 75% and reached RMB169 million.