Suning Easy Purchase (ST Easy Purchase) recently announced the transfer of ownership of four struggling and defunct Auchan subsidiary companies under its umbrella at a symbolic price of a total of 4 Chinese yuan. This move reflects Suning’s strategic adjustment in the face of liquidity challenges and ongoing economic pressure in China, illustrating the difficult reality of the former retail giant’s transformation struggle.
Suning Easy Purchase’s wholly-owned subsidiary Suning International Holdings’ Carrefour China Holdings N.V. signed a stock transfer agreement with Shanghai Youan Law Consultation Limited (acting as Shanghai Auchan Relief Enterprise Service Partnership) to sell the 100% equity of four Auchan subsidiary companies in Ningbo, Hangzhou, Zhuzhou, and Shenyang for 1 yuan each.
The announcement indicated that these four companies have ceased operations, with net assets ranging from -146 million yuan to -693 million yuan, totaling liabilities of approximately 1.76 billion yuan. Additionally, all of them are defaulters subject to execution.
The acquiring party, Shanghai Auchan Relief, was established by Shanghai Youan Law Consultation Limited in conjunction with two local asset management companies, specializing in corporate debt restructuring. Suning Easy Purchase stated that this transaction will bring in professional asset management institutions to lighten the company’s burden through asset and debt restructuring, with an expected increase in attributable net profit of approximately 572 million yuan.
From the sale of subsidiary companies at a low price to focusing on core business, Suning’s strategic contraction and adjustment in adversity are apparent.
In 2019, Suning Easy Purchase acquired an 80% stake in Carrefour China for 4.8 billion yuan, aiming to enhance its overall retail layout through fast-moving consumer goods and offline store resources.
However, due to factors such as the “downgrade” in Chinese consumption, intensified industry competition, and its own liquidity crisis, Carrefour China’s performance continued to decline, with the number of stores decreasing sharply from 228 in 2020 to only four by the end of 2023, with some stores temporarily closed or selling only inventory items.
At the same time, Suning faced a legal dispute with Carrefour’s parent company over the remaining 20% equity payment, with a Hong Kong arbitration tribunal ruling in 2023 that Suning must pay approximately 1.134 billion yuan. Suning Easy Purchase itself has been under the “ST” warning for consecutive losses from 2020 to 2022 and has not yet been able to remove the warning.
The plight of Carrefour China and Suning’s strategic imbalance prompted them to accelerate the divestment of non-core assets and return to their core business in consumer electronics and 3C products.
To address the liquidity crisis, Suning Easy Purchase has been disposing of assets frequently in recent years. In 2024, they achieved a revenue of 56.791 billion yuan, with an attributable net profit of 611 million yuan, marking their first turn from loss to profit, although their non-GAAP net profit remains negative. In the first quarter of 2025, the company’s revenue increased by 2.5% year-on-year, and the attributable net profit was 17.96 million yuan, indicating some operational improvement.
The sale of Carrefour subsidiary companies is part of Suning’s “lean and slim” strategy to concentrate resources on deepening their consumer electronics and 3C business. However, the retail industry as a whole is facing challenges from changing consumer habits and the integration of online and offline channels. Industry insiders point out that Suning’s setbacks in expanding into unfamiliar areas such as fast-moving consumer goods highlight the misalignment between its operational model and industry demands.