(RTTNews) - Alibaba Group Holding Limited announced its agreement to sell Intime department store chain in China to textile and apparel company Youngor Group-led consortium in around RMB 7.4 billion or $1.0 billion deal.
The online marketplace company, which currently holds 99 percent stake in Intime, expects to record losses of around RMB 9.3 billion or $1.3 billion as a result of the planned sale.
The move is said to be inline with the Chinese tech giant's plan to shift away from offline retailing and focus on its core e-commerce and cloud computing businesses.
Alibaba purchased the Chinese department store operator in 2017 in around $2.6 billion deal as part of its plan to expand into the bricks-and-mortar retail segment.
Meanwhile, the company in 2023 undertook a major restructuring, splitting its businesses into six groups and shifting focus to its e-commerce and cloud units.
While announcing the second-quarter results in mid-November, Eddie Wu, Chief Executive Officer of Alibaba Group, had said, "We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses."
Bloomberg reported earlier this year that Alibaba had reached out to multiple prospective buyers for Intime, which has been considered under 'all others' in its financial statement.
In a statement, Alibaba now said it has joined with the 1 percent minority shareholder to sell 100 percent of the equity interest in Intime to a consortium comprising Youngor Group and members of Intime's management team.
The deal closure is subject to merger control clearance in China and other customary closing conditions.
The anticipated loss would reflect in its next earnings result. In its latest second quarter, Alibaba had recorded 63 percent year-over-year increase in net income to RMB 43.6 billion or $6.21 billion, while adjusted net income fell 9 percent to RMB 36.5 billion or $5.2 billion. Second-quarter revenue was RMB 236.50 billion or $33.70 billion, an increase of 5 percent year-over-year.
In Hong Kong, Alibaba shares closed Tuesday's regular trading at HK$83.400, down 1.13 percent.
In pre-market activity on the NYSE, the shares were losing around 0.2 percent to trade at $85.87.
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