(Yicai) Jan. 31 -- Suning expects to have shrunk its annual net loss, the electrical appliances retailer’s fourth in a row, by as much as 80 percent despite higher costs due to closing most Carrefour brand stores.

The net loss likely narrowed 74 percent to 80 percent to between CNY3.3 billion and CNY4.3 billion (USD464.8 million and USD605.6 million) in the year ended Dec. 31, the Nanjing-based company said in an earnings update late yesterday.

Suning may have lost or earned up to CNY100 million (USD14 million) in the fourth quarter, if investment losses, compensation, and other expenses arising from Carrefour outlet closures are factored out, it said.

At its annual work conference earlier this month, founder Zhang Jindong revealed plans to make the company profitable again this year, setting the goals of overall operating profitability and scale profitability at its main 3C (computers, communications, and consumer electronics) business.

He also plans an organizational shakeup with the dual aims of minimizing the management hierarchy and allowing more staff to face the market and respond quickly to it.

Suning’s shares [SHE: 002024] closed 2.4 percent lower at CNY1.62 (23 US cents) each today. The benchmark Shenzhen Component Index dropped 2 percent.

Suning International, a subsidiary, acquired 80 percent of Carrefour China for CNY4.8 billion in September 2019. It closed 137 of the supermarket chain's stores in the first nine months of last year, keeping just 10 open. Carrefour China lost CNY1.3 billion in the first half.

The shutterings resulted in sales revenue tumbling and compensation costs climbing, Suning said. It has also made provisions for the impairment of Carrefour China's goodwill and long-term assets.

Suning continued to focus on developing the home appliances 3C business last year, the company noted. Home appliance sales jumped about 12 percent, and 2,686 new ‘retail cloud stores’ were opened in lower-tier markets, it added. Suning had 10,729 such stores as of last year, with sales of goods climbing more than 20 percent from a year earlier.

Suning will continue to develop in lower-tier markets this year, Zhang also said earlier at its annual work conference. The firm will open more than 3,000 stores and accelerate the development of its e-commerce business, Zhang added.

Editor: Martin Kadiev