"Selling blood to save his son" Gome's "good father" Huang Guangyu

Author: Wang Ziang

After being released from prison, Huang Guangyu returned to Gome, hoping to fight through the "Taobao + Jingdong + Douyin + Little Red Book" multi-habitat combat really happy app.

However, things backfired, and after two years of hard work, Gome was still on the edge of life and death, and the True Happiness App was changed to Gome again.

The "path to fatherhood" from infancy

When the first Gome was born at No. 420 Kou East Street, Qianmenzhu, Beijing, Huang Guangyu began his painstaking "road to fatherhood".

On January 1, 1987, Gome officially became a store specializing in imported electrical appliances, from insisting on small profits and selling quickly to using Beijing Evening News to sew advertisements, Huang Guangyu laid a good foundation for Gome's growth.

In 1992, the 100-square-meter Gome in Zhushikou grew up, in order to make its road go further and have a wider vision, Huang Guangyu waved his hand and named the "Guohao", "Yahua" and "Henderson Henders" and other stores he held under him as Gome Electric Appliances, concentrating on forming a brand effect, and Dumiao Gome became a chain operation model.

In 1993, the Huang brothers, who owned five or six chains of Gome appliances, accumulated a lot of wealth, and it was inevitable that it was time to act separately. 24-year-old Huang Guangyu is not greedy, in addition to hundreds of thousands of yuan in cash, as long as Gome's "custody" begins, he has begun the road of "bringing a baby" alone.

After more than 10 years of development and expansion, Gome has changed from a thin teenager to a strong young man. At the end of 2004, Gome stores could be seen in Chinese mainland, Hong Kong and major cities in Southeast Asia, and this year was also the year that Gome stepped onto the stage of a higher level.

In 2004, Huang Guangyu's Pengrun Group acquired a 65% stake in the assets of 94 Gome stores in 22 cities for HK$8.3 billion. On June 7 of the same year, Gome Electric was successfully listed on the Hong Kong Stock Exchange by backdoor borrowing.

Stepping on the stage of the capital market, Gome not only proved its financing ability, but also represented that China's home appliance chain enterprises as its benchmark have become public socialized enterprises. Also this year, the Huang brothers appeared on the Hurun Report together, and Huang Guangyu's assets exceeded 10 billion yuan, making him the richest man in the mainland for the first time.

In the years that followed, Gome and Huang Guangyu still had a time thriving.

In July 2006, Gome Electric and Yongle Electric merged to implement the dual-brand operation strategy.

In September 2007, the acquisition of the national network of Shaanxi Beestar Electric Appliances further consolidated and strengthened Gome's communication business; In December of the same year, Gome fully managed Dazhong Electric Appliances.

In March 2008, Gome became the largest shareholder of Sanlian Trading; At the end of the same year, Gome completed its historical mission of taking scale expansion as its core strategy, and Huang Guangyu became the richest person on the Hurun Report for the third time in 2004 and 2005.

Huang Guangyu showed the behavior of "picking seedlings and fueling", which not only hurt Gome but also hurt himself.

In November 2008, Huang Guangyu was taken away by the Beijing Municipal Public Security Bureau for investigation.

On January 18, 2009, Huang Guangyu resigned as a director of Gome Appliances, and his status as chairman of Gome was automatically terminated.

On August 30, 2010, Huang Guangyu was sentenced to 14 years' imprisonment for the crimes of illegal business operation, insider trading and bribery by units, and was also fined 600 million yuan and confiscated 200 million yuan of property.

From prison to release, he seems to have only left Gome physically, but his spirit has never been separated from Gome, and he even strongly controls Gome's every move.

But what Huang Guangyu did not expect was that the inseparable and overkill formal "education" was gradually erasing the potential of Gome.

"Fatherly love" that rises and falls never absent

"Strive to use the next 18 months to restore the original market position". This is Huang Guangyu's ambition and the feedback of Gome's current situation.

Using entertaining gameplay to build the renamed Gome App into a social shopping platform is the "perfect plan" for Huang Guangyu and the Internet executives in the company to reshape Gome's glory.

In two years, the unhappiness of "True Happiness" not only made Huang Guangyu recognize the failure of Gome's growth direction, but also put Gome in a situation that is not optimistic.

Gome Retail's net profit from 2017 to 2021 was -450 million yuan, -4.887 billion yuan, -2.59 billion yuan, -6.994 billion yuan and -4.402 billion yuan, respectively, and the cumulative loss has exceeded 19.3 billion yuan, and the loss is expected to expand by 35% to 65% year-on-year in 2022. As of September 30, 2022, Gome Retail's overdue loans were approximately $3 billion.

Not only has Gome, which has not restored its market position, but also needs to consider how to survive this winter together with its current chairman, Huang Xiuhong, the sister of Huang Guangyu.

In the second half of 2022, Gome's expected goal of returning to its market position has not been completed, and negative news such as layoffs, senior resignations, loan arrears, salary arrears, store closures and even bankruptcy is overwhelming; The three executives parachuted from Alibaba are no longer Gome's management.

Gome Chairman Huang Xiuhong personally went live to bring goods, and her popularity and eye-catching are far inferior to Luo Yonghao, Dong Mingzhu, Yu Minhong and others.

Huang Guangyu, who has implemented multiple rounds of reducing his holdings in Gome, has been misunderstood by some people as wanting to "run away".

On February 3, 2023, Zhongguancun issued an announcement that it had recently received a "Notification Letter" issued by Gome Electric Appliance Co., Ltd. (hereinafter referred to as "Gome Appliances"), the concerted action of Gome Holdings, and Gome Retail no longer has a controlling shareholder.

On February 6, Gome said that the current majority shareholder Huang Guangyu holds less than 30% of Gome's retail shares, so the listed company has no controlling shareholders for the time being.

According to HKEX data, as of January 11, 2023, Huang Guangyu's shareholding in Gome Retail was 10.79%. In January 2022, the number of shares held by Huang Guangyu and his wife was 20.23 billion, accounting for 59.94%.

In fact, Huang Guangyu's reduction began as early as 2021.

Since September 27, 2021, Huang Guangyu and Du Juan have continued to reduce their holdings of Gome retail shares, and as of December 7, 2022, their shareholding ratio has dropped from 61.5% to 29.96%, with a cash amount of more than HK $1 billion.

However, according to Gome Retail's announcement, most of the proceeds from the Huang couple's reduction were used to give Gome Retail a loan "blood transfusion".

On December 8, December 14, 2022, December 22, December 30 and January 6, 2023, Huang Guangyu provided Gome Retail with interest-free and unsecured loans totaling HK$780 million, thereby forming a claim against Gome Retail.

On January 18, 2023, Gome Retail announced that Huang Guangyu would maintain his status as a major shareholder through debt-to-equity swaps, and due to the related party transactions, the capitalization of debt was subject to the approval of Gome Retail's shareholders' general meeting and the approval of the Listing Committee of the Hong Kong Stock Exchange. According to the latest disclosure of the Hong Kong Stock Exchange, the Huang couple currently hold 30.85% of the shares.

It can be seen that Huang Guangyu has never given up his "child", and how to find the right direction for Gome next is the most important thing.

"In 2023, it will be sorted out in several key directions, including continuing to do a good job in offline stores, and at the same time giving stores a new meaning. Secondly, Gome's layout will be both online and offline, accounting for 50% each. Third, live streaming will be an important direction to promote the company's development in the future. This is Gome's future plan proposed by Huang Xiuhong.

Refocusing on electrical appliance sales is indeed Gome's only way, which is the big brother of the industry, which has years of confidence and experience, but on the issue of how to step forward, there are not many opportunities for Gome to try and make mistakes.

Cost reduction and efficiency improvement are also the anchors of Huang Xiuhong's planning.

In today's "traffic is king", the effect of tilting the cost and effort more to online live broadcast may be more immediate than that of both online and offline. Although Nai Xue's "predecessors" such as tea, Lele tea, and Yanjiayou have achieved certain breakthroughs by relying on offline stores such as offline "Third Space", unlike Gome, these "predecessors" are young and enterprising.

Gome, which is not big and sliding to the bottom, may not have enough cash flow to support the exploration of new offline stores. Instead of being greedy and insufficient, it is better to make every effort to refine the operation of the live broadcast business, improve the reach rate and conversion rate, and achieve high traffic and high GMV, so that the increasingly poor Gome can win the cash flow of the original market position and return to the peak.

I don't know that in the plan of Huang Xiuhua, who relies on his brother, there is a bit of Huang Guangyu's shadow. But whether Huang Guangyu will take the lead again, he hopes that his "fatherly love", which has never declined, can help Gome ZTE.