Gome Electrical Appliances, the mainland's second-biggest home appliance retail chain, said yesterday that it would probably post a loss for last year under the weight of rising rents and its loss-making e-commerce business. In a statement to the Hong Kong stock exchange, Gome said the losses were "closely linked with the negative impact on the group's business brought about by the consumption overdrafts as well as poor consumer sentiment and confidence as a result of the China's macroeconomic growth slowdown and economic stimulus policies termination". Gome added that the e-commerce "is still at its integration and initial investment stage". The warning of the expected losses follows another statement from Gome last week that it would close its six retail outlets in Hong Kong by mid-March. The shops are not part of the assets of the listed company but the move reflects how the company has struggled since founder and former chairman Huang Guangyu, once the mainland's richest person, was sentenced to 14 years in prison in 2010 for illegal business deals and stock market manipulation, as well as corporate bribery. Shares in Gome have more than halved in the past one year, compared an 18 per cent rise in the benchmark Hang Seng Index. Elyse Wang, an analyst at Haitong Securities, said Gome's e-commerce business was still a long away from the one-year profitability target set by management after the unit generated a loss of 460 million yuan (HK$566.57 million) during the first three months of last year. Wang said the online retail industry needed to grow traffic at the expense of profit margin, one of the reasons for Gome's weak results. In the first nine months of last year, Gome's revenues dropped to 36.1 billion yuan from 44 billion yuan for the same period in the previous year, or a drop of 18 per cent for the period. It posted a net loss of 763 million yuan, compared with a net profit of 2.3 billion yuan for the same period.