Gome reports 30% rise in net profit, targets growth in lower-tier cities

Gome, which is 10%-owned by Bain, plans to maintain this momentum through an aggressive expansion plan in lower-tier cities, where it sees the most abundant opportunities. Specifically, 60% of new stores opened this year will be in second-tier cities in provinces such as Guangdong, Shandong and Sichuan.

The company will also enhance its existing outlets in its tier-one locations, and close those that do not perform. Nineteen stores were shuttered in the first half. Gome has 938 outlets in total, up from 826 a year ago.

The company said that net profit came to RMB1.25 billion ($195 million), compared to RMB962.3 million a year earlier. Revenue also increased 20% to RMB29.8 billion.

Gome's strong results come months after its chairman Xiao Chen relinquished his role at the company. That decision came after Gome's imprisoned founder Guangyu Huang first tried to oust Chen in favor of Huang's sister.

The company is China's second-largest white goods and appliances distributor.

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• Topics
• Greater China
• Consumer
• Bain Capital Asia