Welcome to the WeChat subscription number of “Sina Technology”: techsina
Author | Dream
Source: Bohu Finance
According to Tencent News’ Prism, Huang Xiuhong, chairman of Gome Electric, said at the general meeting of Gome headquarters recently that the company will only provide social security to employees and will not pay wages until the end of December.
And added: In the medium and long term in the future, there is also uncertainty in the payment of wages. After the meeting, the company will issue a letter of commitment, and employees can go to their supervisor to sign.
As soon as the news came out, # GOME STOP Paying Staff Salary# quickly became a hot search, #黄光宇 Couples have cashed out 1 billion Hong Kong dollars#, #GOME Retail lost 22 billion in five and a half years# rushed to the hot search one after another. This year, some netizens ridiculed him that “the crime of righteous words is the first time I’ve seen it.” Gome’s “rotten” is actually a foreboding.
Since the end of last year, many of Gome’s platforms have been exposed to layoffs, business contraction, and even delays in wages.
In the first half of the year, Gome employees shrank from 32,278 to 25,701, a decrease of 6,577 in half a year.
In addition, Gome employees revealed that social security has not been delivered since April, and performance bonuses for more than half a year have not been issued.
In September, Gome’s arrears of wages was on the hot search again.
In addition to “dagong workers”, changes in top management are also very frequent. Last year, former Baidu executives, Gome Online CEO Xiang Hailong, Gome CEO Zhang Deju, and Gome Retail President Wang Junzhou left Gome for various reasons. The newly appointed managers Ding Wei, Cao Chengzhi and Hu Guanzhong are no longer Gome’s management. According to media reports, the longest among them has been in the management position for no more than a year…
At the same time, due to Gome’s debt crisis, relations with suppliers are also tense.
In April 2022, Whirlpool brought Gome to court due to its long-term arrears in payment for goods, involving 82.36 million yuan. However, Gome countered that Whirlpool owed about 10 million yuan in various expenses and over 20 million yuan in unsalable defective products. In Gome’s 2022 semi-annual report, its accounts payable and bills reached 14.437 billion yuan.
(Source: Network)Huang Guangyu and his wife, who are “long-term optimistic about the development of Gome”, have dropped from 61.5% to the latest 42.8%…
The once glorious Gome, now even the payment of employees’ wages is a problem, the boss is still busy reducing the company’s stock holdings and is busy cashing out, waiting for Huang Guangyu, but can’t wait to survive?
Huang Guangyu, the first half of Gome’s life
Before Huang Guangyu was released from prison, whenever there were rumors of his release from prison, Gome’s stock price would skyrocket. On the day of his release from prison, the stock price of Gome Fintech, a Hong Kong stock of Gome, rose by 69%, and Gome Retail stock soared 17.39% as of the close. This is the appreciation of real money from the capital market.
At the age of 18, Huang Guangyu and his brother opened the first Gome electrical appliance store. Because electrical retail at that time was completely a seller’s market, and state-owned enterprises generally had higher prices. In order to enhance its competitiveness, Gome has implemented a low-price strategy. With “small profits but quick turnover”, the gap with state-owned enterprises was widened, and the business was so good that there was a situation where there were not enough goods to sell.
In order to solve the problem of purchasing goods, Huang Guangyu also broke through the rules of the industry and began to cooperate with electrical appliance manufacturers directly without agents, and obtained a stable supply of goods through the “one-ticket buyout” underwriting system, while also reducing procurement costs. Afterwards, Huang Guangyu made Gome invincible by virtue of “selling at a lower price and quickly defeating competitors, after accumulating a large number of customers, forcing manufacturers to lower prices”.
In addition, in order to gain popularity, Huang Guangyu also became the first individual retailer in Beijing to advertise in newspapers, placing Gome’s advertisement on the middle of the “Beijing Evening News”. “Buy electrical appliances, go to Gome” began to slowly occupy the minds of consumers.
(Source: Network)By the end of 2004, the number of Gome stores had reached more than 200. This year, Gome and Suning were also listed in Hong Kong stocks and A-shares successively. The involvement of capital caused a fierce confrontation between the two sides.
With the help of capital, Huang Guangyu started his own annexation plan in an all-round way. In 2005, he annexed the home appliance businesses of Harbin Black Swan and Jiangsu Golden Sun; in July 2006, he succeeded when Dazhong and Yongle had signed an alliance agreement. Cut Hu and acquired the third-ranked Yongle Electric Appliances at a price of HK$5.2 billion; then, after Suning announced that it would acquire Dazhong Electric Appliances for 3 billion yuan, Gome quickly attacked, with 3.6 billion 20% higher than Suning’s offer Yuan, once again successfully intercepted Hu to buy the fourth-ranked Dazhong, thus achieving absolute suppression of Suning.
So far, from 2004 to 2008, Gome’s revenue increased from less than 10 billion yuan at the beginning of its listing to nearly 50 billion yuan, and its net profit attributable to the parent increased from 374 million yuan to 1.048 billion yuan. It was once a leader in China’s home appliance retail industry.
In 2004, 2005 and 2008, Huang Guangyu himself became the richest man on the Hurun Report for three times.
But Huang Guangyu was not satisfied and began to test in real estate, finance and other fields. In 2010, Huang Guangyu lost his freedom because of alleged economic crimes. With the arrest of Huang Guangyu, Gome also broke out in an infighting that lasted for more than two years, which greatly hurt Gome and began to decline. And Gome, without Huang Guangyu, went from plundering to conservative, did not defend this country, and prepared a “mess” for Huang Guangyu.
Huang Guangyu can’t help Gome
From 2016 to 2021, Gome’s total liabilities were 40.827 billion yuan, 45.698 billion yuan, 63.711 billion yuan, 69.227 billion yuan, and 63.338 billion yuan, and the asset-liability ratio in 2020 even reached 98.2%.
(Source: Network)There are two main reasons for this huge debt hole:
1. Aggressive store expansion;
In 2016, the number of Gome stores was only 1,628; by the end of 2021, the number of Gome stores soared to 4,195. In June 2022, Gome closed more than 300 inefficient stores, with a total of 3,895 stores. The home appliance industry has entered the stock market, and online e-commerce has also seized a large part of the market. In addition, due to the impact of the epidemic, Gome’s revenue is not optimistic.
2. Failed acquisition strategies;
According to 36Kr report, in March 2016, Gome completed the acquisition of Yiwei Development Co., Ltd. At that time, Yiwei Development lost 795 million yuan, and bank loans of 3.61 billion yuan were about to expire. In 2017, Gome acquired a 60% stake in Meixin Network for 900 million yuan, and its loss at that time amounted to 546 million yuan. Since then, Gome has used 350 million yuan to acquire Tenda Electric, which has been bankrupt and liquidated. These debts fall to Gome.
In recent years, Gome has also completed the acquisition of Tianjin Gome Warehousing, Gome Holding Group Guangzhou Co., Ltd., Gome Online and other companies, and has participated in projects such as “Zhizhidaojia” and Anxun Logistics. Combing through the public information found that most of the companies invested or acquired by Gome were originally controlled by Huang Guangyu. Take Tianjin Gome Warehouse as an example. Before being acquired by Gome, it was a subsidiary of Pengrun Real Estate, which in turn was 100% controlled by Gome Real Estate.
In addition, the financial report shows that from 2017 to 2020, Gome continued to lose money, with losses of 450 million yuan, 4.887 billion yuan, 2.590 billion yuan, and 6.994 billion yuan, but the scale of revenue was opposite to the scale of losses, which has been shrinking in the past 5 years.
In this case, Gome and others came to Huang Guangyu, who was released from prison. He set a goal: “Strive to use the next 18 months to restore Gome to its original market position.” In addition to drastic layoffs, he focused on launching the platform “Really Happy”, which focuses on entertainment retail, and the platform “Dressing Home”, which focuses on home improvement business.
Huang Guangyu once mentioned that 200 million users have been accumulated in the Gome system, but they are all offline traffic. He hopes to activate them through “true happiness” and become online traffic, giving birth to new sustainable businesses.
It can be seen that Huang Guangyu has great ambitions and hopes to completely change Gome’s “electrical appliance retail gene”, but this is not easy. In the past, there were big brothers such as JD.com and Suning, and then there were Douyin and Kuaishou. Gome, which lacked traffic, could not make a splash.
(Source: Network)According to Wired Insight, in 2021, Gome spent 962 million yuan to promote the “Really Happy” APP, requiring offline store employees to guide customers to place orders through the “Really Happy” APP, and the indicator was as high as 90% at one point. Selling a lot of power, but the effect is very general.
The financial report data shows that in 2021, the “Really Happy” APP will have 440 million annual visits, stable monthly active users of more than 50 million, and annual active buyers of 16.83 million. At the same time, it has 570 million active buyers for JD.com and 869 million active buyers for Pinduo for many years.
In July of this year, due to financial constraints, the entire line of Gome Dressing Home, which was established for 7 years, was suspended. The two e-commerce platforms where real money has been invested have had little effect.
18 months later, Huang Guangyu issued an open letter saying that there is a certain gap between reality and goals. Change the strategic goal to focus on the main business, lose weight and reduce the burden. And set a goal: to achieve higher profitability in 2023 and reach the highest level in the past, to reach the best level in history in 2024, and to significantly exceed the best level in history in 2025.
And at the end of the letter, he said, “We still need more tolerance and support from everyone, and we need everyone to give the company more time and space.”
write at the end
In September 2022, Gome disclosed its semi-annual report. The company’s revenue was cut in half to 12.109 billion yuan, and the net profit loss further expanded to 2.966 billion yuan.
Carrying huge debts, making losses year after year, but hard to find growth in revenue, frequent changes in the company’s top management, and problems with employee salaries, can Gome really survive like this? A netizen said: “There is still time, Gome has more than 3,000 offline stores.”
But it has also been said that when the giant falls, the body temperature is still warm.
(Disclaimer: This article only represents the author’s point of view and does not represent the position of Sina.com.)
This article is reproduced from: https://finance.sina.com.cn/tech/csj/2022-11-04/doc-imqmmthc3337004.shtml
This site is for inclusion only, and the copyright belongs to the original author.