Chinese electronics retailer Gome’s stock rises despite media reports that it has suspended staff pay

The stock dropped 3.88 per cent on Wednesday following speculation on Chinese social media about the pay cuts

Company released a profit warning on October 28 saying its sales revenue for the first three quarters of 2022 had declined by about 55 to 60 per cent

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Results for the full year of 2022 are expected to decline ‘significantly’, according to a GOME spokesperson. Photo: Shutterstock Images

Published: 8:00pm, 4 Nov 2022Updated: 8:44pm, 4 Nov 2022

Gome Retail Holdings, one of China’s largest electronics retailers, which is said to have suspended staff payments and is seeking a debt restructuring, saw its shares rise in Hong Kong on Friday.

The stock closed 1.61 per cent higher at HK$0.126. On Thursday, its shares closed at HK$0.124, dropping 3.88 per cent following speculation on Chinese social media about the pay cuts.

Staff were asked to sign a letter acknowledging the suspension of pay, photos of which have been circulated online. “Since October 2022, I understand the company may suspend salary payment in the following six months to a year, and I am ready to go through [this] difficult time with the company,” a photo circulating online shows.

Both Gome Retail and parent firm Gome Holdings Group did not respond to requests for comment on Friday.

Huang Xiuhong, an executive director at Gome Retail, told staff during an internal meeting on October 28 that the company would not pay their salaries until the end of December, some Chinese media reported on Thursday and Friday.

The company also released a profit warning on October 28 and said that the group’s sales revenue for the first three quarters of 2022 had declined by about 55 to 60 per cent compared with the same period last year, due to a complex and volatile consumer market environment created by the coronavirus pandemic.