Chinese e-commerce giant Alibaba Group announced that it had reached an agreement with another minority shareholder to sell 100% of its stake in Chinese department store chain Intime Retail, with the buyers including Youngor Group and members of Intime’s management team.
The transaction is still subject to the approval of China’s anti-monopoly review and other customary closing conditions, it said.
Alibaba currently holds about 99% of Intime’s shares and the total proceeds from the sale amount to 7.4 billion yuan, with a loss of about 9.3 billion yuan expected from the deal, according to the announcement.
Youngor Group said that it has always focused on investments and development in the fashion sector and, together with Intime’s management, it aims to “strengthen the supply chain and complement the fashion ecosystem.”
Youngor will provide Intime’s management team with sufficient operational autonomy to support Intime’s further high-quality development, it said.
In 2023, after the “1+6+N” organizational restructuring, Alibaba began focusing on its core businesses, such as e-commerce and AI, and planned to either quickly profit from or capitalize on non-core businesses to realize asset value. The physical retail business, which had been a drag on its overall performance, became one of the first projects to exit.
Alibaba’s financial report shows that in the six months ending September 30, the company generated 6.5 billion yuan in cash flow from exiting multiple investments.
In February, 2024, Alibaba Chairman Joe Tsai, during an earnings call, defined traditional physical retail businesses as non-core and described the exit as “very reasonable,” while noting that due to current market challenges, the exit would take time.
Alibaba CFO Xu Hong said at the time that, excluding physical retail businesses like Sun Art Retail, Hema and Intime, the group’s total revenue would grow by about 8% year-over-year for that quarter, and the group’s adjusted EBITA margin would rise by about 4 percentage points to around 24%.
Intime Department Store, founded by Shen Guojun, opened its first store in 1998 in Hangzhou. It went public in Hong Kong in 2007, becoming the first privately owned mainland Chinese department store company listed on the Hong Kong Stock Exchange.
In March 2014, Alibaba invested HK$5.37 billion to become the second-largest shareholder of Intime and later, with more shares transferred from Shen, Alibaba eventually become the single largest shareholder. In May, 2015, Alibaba CEO Zhang Yong replaced Shen as the chairman of Intime’s board of directors. In January 2017, Alibaba, together with Shen, privatized Intime for HK$19.8 billion.
Intime Department Store was a key part of Alibaba’s new retail strategy. By gradually taking control of Intime, Alibaba aimed to create a fully “internet mall,” leveraging digital transformation of “people, goods, and places” to achieve seamless integration of membership, products, and services.
According to information from Alibaba, Intime now operates 60 department stores nationwide and several projects are still in development.
Youngor has been advancing its commercial real estate projects. In August this year, Youngor Group and Tianmu Li jointly launched the “HAI550” new concept mixed-use complex on Shanghai’s Huaihai Zhong Road, with Youngor Group as the owner and Tianmu Li responsible for leasing.