By South China Morning Post | Created at 2024-12-17 09:31:37 | Updated at 2024-12-17 11:47:44
2 hours ago
Alibaba Group Holding is taking a 9.3 billion yuan (US$1.3 billion) loss in its sale of Intime, one of China’s leading department store operators, as the e-commerce giant walks away from offline retailing to focus on its core businesses.
The company is selling its entire stake in the retail chain, in which it first invested in 2014, to a consortium of purchasers comprising Youngor Group and members of Intime’s management team, according to a filing to the Hong Kong stock exchange on Tuesday. Youngor Group is a textile and clothing company based in the eastern city of Ningbo.
The deal was valued at around 7.4 billion yuan, less than half of what Alibaba sank into the company. The divestment comes seven years after it teamed up with Intime’s founder to take the mainland shopping giant private in a HK$19.8 billion (US$2.5 billion) cash transaction.
Alibaba’s Hong Kong-listed shares fell 1.1 per cent on Tuesday, while Youngor’s Shanghai-listed shares rose 3.7 per cent. Alibaba owns the South China Morning Post.
The move marks another key step for the Hangzhou-based tech giant in retreating from its “new retailing” strategy, which company founder Jack Ma initiated in 2016 as a way for Alibaba to blend its online and offline shopping resources. Alibaba’s US$692 million investment in Intime in 2014, ahead of the e-commerce firm’s New York listing, made it the retailer’s second-largest shareholder at the time. Over the past decade, Alibaba gradually raised its stake to 99 per cent.
Despite the expected loss, the Intime sale is based around Alibaba’s considerations for its future business structure, according to Kenny Ng, a strategist at Everbright Securities International.
