Alibaba to record $1.3bn loss in sale of intime stores

Alibaba Group Holding has agreed to sell its Intime department store business to Youngor Fashion Co for around $1 billion in a move to offload non-core assets.

The 7.4 billion yuan deal announced on Tuesday, which confirmed an earlier Bloomberg News report, will see the Chinese ecommerce giant record a loss of 9.3 billion yuan ($1.3 billion) on its initial investment in Intime. That acquisition had been a bet on integrating online and offline retailing into a unified business back in 2017. Alibaba had reached out to several potential buyers for Intime as it sought to streamline its operations, people familiar with the matter said earlier this year.

Once a dominant player in China’s ecommerce field, Alibaba is struggling to grow amid competition from rising rivals like PDD Holdings Inc. and ByteDance. That’s forced a hard pivot under the leadership of co-founder Eddie Wu, who took on the chief executive officer role more than a year ago, toward consolidating its core businesses and focusing investment into the most promising growth areas. Alibaba is now integrating its domestic and international ecommerce operations, under the leadership of Jiang Fan, and has been steadily selling off holdings it doesn’t consider essential.

Combining online and offline commerce was a centerpiece strategy under previous CEO Daniel Zhang, and the company invested billions of dollars into modernising physical retailers like Sun Art Retail Group and Suning.com. The company has talked about the concept less in recent years and considered selling the Intime department store arm as early as February.

Data released Monday showed China’s total retail sales rose the slowest in three months in November, missing even the most bearish forecasts and indicating that domestic demand remains sluggish. Chinese policymakers have made boosting consumption a top priority for next year.