(Yicai) Sept. 14 -- Cash-strapped Chinese retailer Gome Retail Holdings has carried out major adjustments to its organizational structure, dividing its home appliance business into two geographical regions.

Gome Electrical Appliances will be split into Area A and Area B. The former will be in charge of branches in northern and southern China, while the latter will control the branches in northeastern, western, and eastern China, Yicai learned from an internal document obtained yesterday from a source at the Beijing-based parent company’s public relations department.

According to the internal document Gome Retail issued on July 31, the company will have several business units after the restructuring, including Gome Electric, Gome App, Anxun Logistics, Commercial Real Estate, and International Business Department.

Li Juntao, vice president of Gome Electrical, and Song Linlin, former vice president of Gome Electric and now in charge of Gome App and Anxun Logistics, will be appointed new presidents of Area A and Area B, respectively, the internal document showed.

“Gome Electric Appliance’s division into Area A and Area B is because the two business units can compete with each other,” a former employee told Yicai. “The company’s main asset is the brand, so it has to develop its joint venture and cooperation businesses.”

Gome Electric Appliances has lost its offline momentum with the closing of flagship stores in many cities, including Guangzhou and Suzhou. Meanwhile, e-commerce platforms such as JD.Com have accelerated their expansion offline.

Gome Retail’s net loss widened 19 percent to CNY3.5 billion (USD487 million) in the first half from a year earlier, according to the firm’s semiannual financial report. Revenue plunged nearly 97 percent to CNY415 million (USD57 million).

In its semiannual report, Gome Retail said it would continue to focus on its main business of home appliance retail, vertical retail of household appliances, and consumer electronic products and strengthen new operation methods like livestreaming e-commerce to seize new growth opportunities.

Gome Retail’s offline business in many areas is stagnated, an industry insider told Yicai. Whether the company can transform successfully with the help of new joint ventures and livestreaming e-commerce is yet to be seen, the insider noted.

Gome Retail is a traditional company, so some of its executives may not have adapted to doing e-commerce, new media, and internet businesses yet, according to the former employee.

Editor: Futura Costaglione