Alibaba Group Holding Limited has announced its agreement to sell its Chinese department store chain, Intime, to a consortium led by Youngor Group for approximately $1.02 billion (RMB 7.4 billion).
The deal is part of Alibaba’s strategic shift away from offline retail operations to focus on its core e-commerce and cloud computing businesses.
Alibaba, which currently holds a 99% stake in Intime, expects to record a loss of about $1.3 billion (RMB 9.3 billion) from the sale. The company acquired Intime in 2017 for $2.6 billion as part of its expansion into bricks-and-mortar retail.
The agreement includes selling 100% equity interest in Intime, with the consortium comprising Youngor Group and members of Intime’s management team. Alibaba said the deal’s closure remains subject to merger control clearance in China and other customary conditions.
The move follows Alibaba’s restructuring efforts in 2023, which divided the company into six groups and emphasized its e-commerce and cloud computing operations. In mid-November, CEO Eddie Wu highlighted the company’s focus on strengthening its core businesses while improving operating efficiency across other divisions.
The anticipated loss from the sale will reflect in Alibaba’s upcoming earnings results.
In its latest second quarter, the company reported a 63% year-over-year increase in net income to $6.21 billion (RMB 43.6 billion), while adjusted net income declined 9% to $5.2 billion (RMB 36.5 billion). Revenue for the quarter rose 5% year-over-year to $33.7 billion (RMB 236.5 billion).
Earlier this year, reports indicated that Alibaba had approached several prospective buyers for Intime, which has been classified under “all others” in its financial statements.
On Tuesday, Alibaba’s shares closed 1.13% lower at HK$83.400 in Hong Kong. On the NYSE, shares were down 0.2% in pre-market trading at $85.87.
