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Gome Set to Add Outlets

Hong Kong-listed home appliance retailer Gome Holdings Limited will invest HK$32 million (US$4.1 million) to add more stores on China's mainland, today's The Beijing News reported, quoting the company's executive director Du Juan.

Du was speaking yesterday at the presentation of Gome's first mid-term financial report after going public.

According to the report, Gome earned a profit of HK$246 million by the end of September, nearly a double that of the previous half-year.

Despite the soaring profits, Gome doesn't plan to pay cash dividends because it wants to use the cash to expand its business, Du said.

It will use HK$32 million to open more stores in China's key cities and secondary cities.  By the end of this year, four new retai stores of traditional home appliances will be added to the existing 116 stores in the country, and 12 new digital product specialty stores will be added to the current 18 nationwide.

The investment for a traditional home appliance store requires HK$1.2 million, while that for a digital product store costs between HK$400,000 and HK$500,000.

Gome also aims to increase market share in the second fiscal year from the 2.5 percent, Du added. Its parent company, Gome Group, hopes to expand its market share to 15 percent from the current 5 percent.

(Shanghai Daily December 3, 2004)

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