A logo of Intime Retail is pictured at its Beijing office building in Beijing, China January 10, 2017. REUTERS
Dec 17 (Reuters) – Alibaba Group (9988.HK), said on Tuesday it would sell its Chinese department store unit Intime and book a $1.3 billion loss from the deal, as the retail giant reshuffles its business portfolio to focus on its core e-commerce operation.
The sale marks a further acceleration in Alibaba’s restructuring after the group split into six business units last year in its biggest-ever revamp and announced a series of top management reshuffles afterwards.
The company last month unveiled a plan to integrate its domestic Chinese and international e-commerce platforms into a single business unit run by one leader for the first time, as it faces growing competition from discount-heavy retailers at home and abroad.
Rival platforms such as PDD Holdings’ (PDD.O), Pinduoduo and Temu, along with ByteDance’s Douyin and TikTok, have stepped up competition with Alibaba by targeting cost-conscious shoppers with rock-bottom prices on everything from headphones to sweaters.
Alibaba said on Tuesday it would sell Intime to a consortium comprising Youngor Fashion (600177.SS) and members of Intime’s management team for 7.4 billion yuan ($1.02 billion), subject to customary regulatory approvals.
Alibaba purchased Intime in 2017 in a $2.6 billion deal to expand into the bricks-and-mortar retail segment and currently holds a 99% stake in the business.
The e-commerce giant has been looking to sell a number of consumer sector assets, including Intime, grocery business Freshippo and retailer RT-Mart to focus on its core business, Reuters reported in February.
Alibaba, under former boss Daniel Zhang, had expanded its presence in the retail sector by taking over several brick-and-mortar chains, including electronics retailer Suning and hypermarket operator Sun Art Retail (6808.HK), which runs RT-Mart.
But China’s challenging consumer environment has put pressure on all retailers and e-commerce platforms.
In April, Alibaba co-founder Jack Ma expressed support for the internet giant’s restructuring efforts and acknowledged past mistakes in a lengthy memo to employees.
Reporting by Roushni Nair and Rishav Chatterjee in Bengaluru; Writing by Miyoung Kim; Editing by Vijay Kishore, Sonia Cheema and Jamie Freed
