Gome profits rise 34% on store closures, subsidies

Electronics retailer Gome Electrical Appliances (0493.HK) saw profits rise 34% to US$206.58 million in 2009 after closing 189 stores in mainland China, the South China Morning Post reported. Revenues fell 7% to US$6.25 billion. In addition to lower costs achieved through store closures, Gome said profits were helped in the second half of 2009 by stimulus policies aimed at encouraging residents of rural areas to buy home appliances. Gome said its first half performance disappointed due to liquidity pressure and the initial negative impact of the arrest of Gome founder Huang Guangyu, also known by the Cantonese romanization of his name, Wong Kwong-yu. The company plans to close 20 more stores this year, but will open about 100 new stores in lower-tier cities.