(Yicai) Oct. 19 -- Gome Retail Holdings’ stock price climbed after the cash-strapped Chinese retailer rebutted a report that said it had closed all of its stores in China’s Guangdong province while also admitting that the number had dropped considerably.

Gome [HKG: 0493] finished 2.4 percent higher at 4 Hong Kong cents (1 US cent) a share, after soaring by as much as 12.2 percent this morning. The stock sank 16 percent yesterday.

Gome had two self-operated stores and 107 franchised outlets in Guangdong as of the end of last month, compared with 14 and 181 at the end of June, the Beijing-based company said yesterday. The retailer is optimizing its online and offline business integration strategy, so will continue to adjust store numbers, it added.

On Oct. 16, Yicai learned from two home appliance suppliers in southern China that Gome's electrical appliance unit had closed its last remaining store in Guangdong. One of the suppliers also noted that Gome still owes them money, and the matter has come to a standstill.

After Gome’s liquidity woes worsened last year, it has been closing shops to cut expenses while seeking new funding to remain in business.

Last May, Gome raised about HKD776 million (USD99.2 million) after placing 1.96 billion shares priced at 40 Hong Kong cents apiece with at least six investors. It planned to use 60 percent of the funding to expand its online and offline platform business, 10 percent to repay debt, and the rest for general capital. But the money ended up going to repay debt, the firm said on Oct. 6.

Founded by Huang Guangyu in 1987, Gome started out as a small electronics store in the capital city. The firm expanded quickly over the years, becoming one of the country’s biggest and most well-known retail chains for electronics and home appliances, with a vast network of bricks-and-mortar stores.

Gome has since come under intense pressure from other major electronics retailers such as Suning, JD.Com, and Alibaba Group Holding’s Tmall, and Covid-19 outbreaks in China also forced it to shutter stores and upended online deliveries.

For the six months ended June 30, Gome's operating income shrank 97 percent from a year earlier to CNY414.8 million (USD56.8 million), its latest trading report showed. The firm’s net loss widened 19 percent to CNY3.5 billion (USD484 million).

Editor: Martin Kadiev