Gome makes profit warning

Absrtact: July 24, Gome (00493.HK, hereinafter referred to as Gome) issued a profit warning, said it based on the unaudited comprehensive management of the accounts preliminary review, is expected to be a net loss by the end of June 2012. This means that, according to Gome in the first quarter to achieve 67.39 million yuan net profit meter

July 24, Gome (00493.HK, hereinafter referred to as "Gome") issued a profit warning, said it is based on the unaudited comprehensive management of the accounts preliminary review, is expected to be a net loss by the end of June 2012. That means Gome's losses in the two quarter will be more than $67.39 million, according to Gome's 67.39 million yuan net profit in the first quarter.

More importantly, this is Gome's first loss in 8 years, is Gome's internal end control game, Azalea returned to power after the first loss. Although the home appliance industry listed companies share the same loss news, although the same as home appliances giant suning first half of the net profit also fell nearly 30%, but Gome 8 years of the first loss of news is still attracting attention.

For such a once-illustrious record of the domestic appliance chain giant, a sense with a strong industry vane flavor. What people need to figure out is, what does Gome's first loss in the past 8 years mean, is the industry's problem, or is gome itself the cause of the impact of the macroeconomic situation, or Gome's own strategic mistakes?

Trace the cause of the loss

Macroeconomic situation, industrial policy, electricity quotient competition, Gome internal strategy error, in the end who has pushed Gome to the loss?

For this loss, Gome chief Financial controller Fang attributed to macroeconomic weakness coupled with fierce competition in the e-commerce industry.

In the first quarter, Gome's sales fell 28.62% Year-on-year, to 9.762 billion yuan, attributable to the parent company's shareholder net profit fell 87.79% Year-on-year, to 67.39 million yuan, the overall performance of the lowest level of history.

It is noteworthy that in the financial data, sales revenue (revenue) decline and profit decline is two different concepts, in the home appliance industry, for example, the first half of the United States has experienced a decline in revenue but profits rise, indicating its internal reform to control the cost of the effect.

What does it mean for gome to have a double fall in revenues and profits?

In this regard, from the home appliance industry analysts believe that "the recent year's macroeconomic situation and the impact of household appliances industry policy can not be ignored." From the macro-economic situation, rent, labor, logistics cost of a large increase in the chain of household electrical appliances have a significant impact, because rent, labor, logistics is its main cost. ”

Gome's former executive vice President assistant, Xinri, vice president of Jiangsu New Day Electric Vehicle Co., Ltd., also told the China Business newspaper, "The appliance belongs to the consumer durables, the industry grows naturally has a kind of relative economic growth speed change trend, just like the stock of listed company will exceed or oversold, when the economic situation is good, It will grow more than the growth of the macro-economy, and when the economic situation is bad, it will also show a magnifying effect. GDP growth fell to 7.5% in the first half of 2012, and the home appliance industry was affected by the normal. ”

However, this does not become a complete explanation of Gome's first loss in 8 years behind the hope. To operate the air conditioning gree electrical appliances, for example, in the home appliance industry in a depressed background, Gree has realized the double growth of revenue profits. And more importantly, Gree and Gome have one thing in common, that is, the control of home appliances channels.

So there are questions about Gome's loss and its inability to use its channel advantage. "The source of Gome's losses," says a blog post, "in the home appliance industry, the background of overproduction, the United States did not make good use of the advantages of the channel, the supply chain and the operation of the chain optimization, but blindly use its market dominance to crush suppliers, and ultimately lead to suppliers to cut corners to obtain price advantages, but, This, in turn, led to contempt for the value of consumers, which eventually led to the exposure of the crisis. ”

and an unnamed Gome insider told reporters, "Gome loss and the company is not unrelated, in the outside world, Gome control of the game has ended, but from the internal view, two years ago, the fight to the company left a big shadow, While Gome is trying to avoid similar situations from corporate governance and institutional design, it is clear that the bosses ' personal authority has been strengthened. ”

"This strengthening of the major performance is Azalea after the leadership, changed the Chen Xiao times a large number of close shop, to enhance the profitability of a single store strategy, continue to promote the wolf in the era of the extensive expansion of Wong Kwong Yu's strategy, the macroeconomic situation to judge the mistakes of the United States finally pushed to the margin ”

Public data show that in 2011, Gome listed some of the new stores 282, closed the inefficient stores 29, the number of stores from the end of 2010 826 to 1079, plus unlisted stores and large and medium electrical stores, Gome group operation of the total number of stores reached 1737. By the end of 2011, Gome's staff had risen from 49470 in 2010 to 59624.

At this time, it is China's soaring rents, labor costs, the move to Gome's profits have a significant impact. In fact, Gome's performance in the 2011-year Four seasons began to appear sharp decline. Data show that Gome 2011 three quarter of the quarterly profit reached 538 million yuan, but 2011 years of the Four seasons fell sharply to more than 49 million yuan. According to the annual earnings, 2011 Gome staff costs amounted to 2.314 billion yuan, 2010 was 1.728 billion yuan, up 33.91% year-on-year.

Return to price tactics can restore the situation?

Reform is imperative, but on the one hand, Gome is eager to improve the profitability of a single store, on the other hand, the price war on the end of the contradictory coping strategies, in the end can be a good idea to save? In the new round of competition caused by electricity quotient, what is the essence of the reform of the

Gome issued a semi-annual earnings warning at the same time, Gome also began to implement a series of countermeasures. One of the important things is to improve the profitability of a single store.

After the announcement, Gome decided to close the unsatisfactory performance of the shop and cut the operating area, the target is to reduce the operating area by 10% to 15% at the end of 2012, involving stores 170~250 home.

Gome insiders told reporters, "The rising operating costs, the decline in the profit of a single shop so that Gome today has to return to the strategy of the Chen era." ”

However, to enhance the profitability of a single store, Azalea has its own new creation. According to sources, Gome is launching a "store adjustment", on the one hand all stores according to the size of sales classification, divided into flagship stores (annual turnover of more than 80 million), Medium-sized stores (36 million yuan) and small stores (24 million yuan below), And the assessment from the original regional division as a unit to the store units, on the other hand, the more stringent cost control of small stores, that is, brand manufacturers outside the sales staff to evacuate the small stores, to be responsible for Gome's self-employed, sales staff paid by the manufacturer.

The move, which is seen as a measure of Gome's control of staff costs and control of the terminal, has provoked a backlash from suppliers that it would be a major disadvantage to consumer feedback.

China Electronic Chamber of Commerce Deputy Secretary-General Lu Xianbo also reminded Gome to be cautious about the reform, he believes that the state of the United States is eager to profit is beyond Suning, but "such a move has greater difficulty", is likely to outweigh the gains.

There is news that the current market pattern of Huang Guangyu has produced dissatisfaction, instructed Gome will participate in the price war, to the electricity market to carry out a thorough shuffle. Gome President Wang Junzhou said 2012 Gome Mall to achieve China's largest online home appliance retailer, the next two or three years to achieve China's online market share 15% of the development goals.

It is based on this goal, in the first half of 2012, Gome restructured the high-level structure to sprint electric business field, in the personnel composition, Shenyang original general manager Dingdonghua took over the Bowser Network CEO of Gome acquisition, but also as the main head of Gome Electric Online Mall, Shandong Gome Original general manager Handepeng continued to serve as Gome Online mall general manager.

At the same time, the Bowser network occupies one of the three board seats of Fang as the chief financial officer of Gome, Li Juntao as Gome's senior vice president of the operating system, Guixian as director of information and Logistics, senior vice president of the Gome online company general manager.

In this respect, people familiar with the United States told reporters, "Look at the history of these people you will be able to understand Gome's future competitiveness in the field of electric business." ”

The above people also pointed out: "The essence of the electric business is not the price war, but the management benefit created by the fine management, is the value excavation of the data by the fine tillage refinement, this is a set of operation system that needs fresh thought and fresh thinking." And from the history of Gome, is basically a group of fighting and killing generals, they are good at Gongchenglvede-style offense, but less than the wisdom of the clever, and this is gome in the era of the short board. ”

"And from the current Gome internal view, Azalea, basically will listen to the elderly, and as president or key Wang Junzhou, Li Juntao and so on have been 50 years old, whether these people can fundamentally introduce new ideas remains to be seen." ”