Gome pulls plug on electrical shops and 100 jobs

Redundancies begin next month as mainland retail giant reveals it's closing Hong Kong stores

PUBLISHED : Monday, 21 January, 2013, 12:00am
UPDATED : Wednesday, 26 October, 2016, 2:38pm


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Electrical appliance retailer Gome is closing its six shops in Hong Kong, throwing some 100 people out of work - starting in just 11 days on February 1.

The company announced over the weekend that it would be switching its Hong Kong business focus to wholesale trade.

A Gome spokeswoman in Hong Kong said: "It is a change of direction of business, from retailing to wholesaling or bulk trade. We hope to take advantage of Hong Kong's edge in geographical location and commerce and trade to develop our international procurement business."

The flagship store in Causeway Bay will close on March 16.

Gome's five other Hong Kong shops - in Tsuen Wan, Kwun Tong, Yuen Long, Tai Po, and Tuen Mun - will close on February 1.

The spokeswoman said some 100 workers would be affected. "They will be compensated properly according to the labour laws. The staff members have been informed and we have not received any complaints," she said.

Customers holding Gome cash vouchers could redeem them before the shops close, according to the spokeswoman.

"We can also arrange refunds," she added.

A hotline on 2177 7188 has been set up for customer inquiries.

The Gome Group was founded in Beijing in 1987 and has about 1,070 mainland stores.

It opened its first Hong Kong retail outlet in Mongkok, selling digital and audiovisual products. It was listed on the Hong Kong Stock Exchange in 2004. At its peak, there were more than 10 branches in the city.

In a statement posted on the stock exchange website yesterday, Gome emphasised that its stores in Hong Kong were not part of the Gome Group and "will not have any impact on the [group's] operation and financial position".

News of the closures came just days after the 92-year-old British music retailer HMV entered administration, a form of bankruptcy. It blamed a fall in CD sales as customers switched to buying music online. It remains unclear what will happen to the six HMV outlets in Hong Kong.

Meanwhile, unions petitioned the government headquarters against plans to import foreign labour.

Officials recently floated the idea as a way of ensuring the construction industry had a big enough workforce to back up government promises of boosting the public housing supply.

Former legislator Ip Wai-ming, of the Federation of Trade Unions, said yesterday that they would "fight until the end" against imported labour.

He added: "The only purpose it can serve is to help employers force down wages of local workers who will have no way to improve their living."