Source | Retail ID | lingshouke Author | Shili
A loss-making financial report has prompted the market to reassess Gaoxin Retail's reform. On November 11, Gaoxin Retail released its first interim report after DCP Capital took over. The report showed that for the six months ended September 30, 2025, the company turned from profit to loss, recording a net loss attributable to shareholders of 123 million yuan, compared with a profit of 206 million yuan in the same period last year. This loss is not just a pain in the transformation process, but more like an early test of this radical reform. At the beginning of this year, DCP Capital spent HK$13.138 billion to take control of Gaoxin Retail from Alibaba. The market was waiting to see if this private equity fund, known for restructuring, could find a new growth path for the old retail giant. After taking over, changes quickly landed: the founder completely stepped down, and the DCP management team fully took over; the company increased internal compliance efforts, and operating executives were investigated; the organizational structure was also re-divided, compressing the original six operating regions into four. However, the speed of reform has not been reflected in performance. The latest financial report shows that multiple core indicators are declining, and this just-restructured retail company has delivered a report card with red lights. During the reporting period, the company's total revenue was 30.502 billion yuan, a year-on-year decrease of 12.01%. Among them, sales of goods, accounting for more than 90%, were 29.081 billion yuan, down 12.4% year-on-year. The report attributed the decline to "intensified market competition and weak consumption," but this seems difficult to fully explain the depth of the decline. What better illustrates the problem is same-store sales data. In the first half of fiscal year 2026, Gaoxin Retail's same-store sales decreased by 11.7% year-on-year. The report shows that the number of items purchased per consumer and the average selling price of goods decreased, leading to a decline in average transaction value. In other words, fewer customers are coming, and those who come are spending less. Behind this is not just a weak consumption environment. Over the past year, Gaoxin Retail has frequently changed management, and the old and new teams are still in a磨合 period. Coupled with service shrinkage due to cost reduction, these factors have affected store operations. Data shows that in fiscal years 2023 to 2025, the company closed 40, 20, and 9 stores respectively, and closed another 7 stores in the first half of fiscal year 2026. Store closures on one hand reduce merchandise sales and rental income, and on the other hand, cost reduction also lowers service quality. The result is that the remaining stores continue to face pressure on per-store revenue. During the reporting period, the company's rental income was 1.403 billion yuan, a decrease of 105 million yuan from the same period last year, down 7% year-on-year. The report explained that the main reasons were the implementation of "rent reduction and stabilization" policies, adjustment of tenant structure, and phased impacts from commercial street renovations. To stabilize tenants and promote store upgrades, Gaoxin Retail is accelerating store renovations: it plans to complete about 30 store adjustments this fiscal year, and more than 200 stores by the next fiscal year. This approach of trading short-term profits for long-term improvement, while enhancing the overall environment, also compresses current profits and cash flow. This chain reaction ultimately reflects on the profit side. In the last fiscal year (ending March 2025), the company still posted a net profit attributable to shareholders of 405 million yuan, which was seen by the outside world as a sign of "successful turnaround." But this loss has begun to raise market doubts about the quality of that year's profit. In fact, the profit during that period was mainly supported by one-time cost compression, such as reduced sales and marketing expenses, decreased administrative expenses, optimized manpower structure, and cost control. The latest financial report confirms this: the costs that should have been cut have basically all been cut, but the decline in the main business has not stopped, making the loss a natural result. DCP Capital's reform has progressed quickly in organizational adjustment and cost control, but the real test is in the second half. Perhaps Gaoxin Retail, which is in a "half-time break," has not yet fully seen the direction of reform. Gaoxin Retail's recent loss is actually the pain of the major reform after DCP Capital took over. The reform is strong and fast, but from the latest financial report, both the results of efficiency improvement and short-term pressure have appeared simultaneously. "Since DCP bought Gaoxin Retail from Alibaba, the company's pace has suddenly accelerated several beats," said one retail industry insider. The first move was to adjust the structure. Specifically, founder Huang Mingduan stepped down, and DCP Capital's CEO Hua Yuneng took over as chairman of the board. He also said that from internal processes, the approval chain has been greatly shortened. In the past, approval processes might take several days, but now the time has been significantly reduced. Efficiency has improved significantly, but at the same time, many old employees have left, especially those who had been with the company for more than ten years. It is understood that some old RT-Mart employees who had worked with Huang Mingduan for many years chose to retire or leave with severance pay before the company changed hands; some also left after DCP Capital took over. Previously, Lv Guoming, general manager of RT-Mart Group's grocery (FMCG) merchandise department, left the company not long ago. He had worked at RT-Mart for 15 years and was one of the core veterans who accompanied Huang Mingduan in expanding the market, having led the joint procurement project between RT-Mart and Auchan. In addition to personnel adjustments, DCP also targeted the supply chain. The industry has always known that the traditional supermarket model of "channel fees" and "shelf fees" made the supply chain complex. After DCP took over, the first step was to sort out compliance processes and shorten the supply chain. This can indeed prevent risks, but it also caused some business to stall in the short term, and supplier relationships were renegotiated, which could not be restored smoothly overnight. The organizational structure has also been adjusted. The original five operating regions were compressed into four, with the Central China region abolished and its business merged into surrounding regions. Streamlining can save money, but the problem is that the regional span is larger and the management radius is longer. But retail relies on localized response; once the distance is stretched, it may affect market agility. The financial report shows that same-store sales in the first half of fiscal year 2024 decreased by 11.7% year-on-year, reflecting the short-term side effects of the structural integration period. At the operational level, DCP's thinking is clear: first stop the bleeding, then create blood. The company closed loss-making stores, shrank non-core businesses, and concentrated resources on two main lines: the community medium-sized supermarket "RT-Mart Super" and the warehouse-style "M Member Store." Most member stores are converted from old hypermarkets, so there is no need to re-select locations, saving rent. Super follows the route of "fresh food + dining + daily necessities," closer to the community. Such changes also bring many challenges. If M Member Store is benchmarked against Sam's Club and Costco, it still lags far behind in both brand awareness and supply chain bargaining power. New formats require burning money and are slow to show results. In addition, store closures and layoffs have helped the company save labor costs, but the profit for fiscal year 2025 has not fully turned positive. In any case, DCP has indeed taken an old retail company and reorganized it. Efficiency has indeed improved, but the organization and business are not yet fully stable. So Gaoxin Retail is now in a typical adjustment period. Efficiency improvement is only the first step; the key is whether these new practices can be turned into stable growth. This latest interim loss puts Gaoxin Retail and its shareholder DCP Capital to the test. The financial report is equivalent to a test, meaning that controlling costs is not difficult; the real question is how to make a physical retail giant "come back to life." After the financial report was released, Gaoxin Retail's overall direction did not change. It proposed a "three-year strategy," continuing the thinking of CEO Shen Hui when he took office, to return to the essence of retail. The so-called "return" specifically means a strategy based on "healthy products + happy experiences + thoughtful services," creating a retail model that balances experience and efficiency for all customers within three kilometers. It also set a clear goal of renovating more than 200 stores in the next fiscal year. Obviously, DCP and management regard the loss as a period of pain, hoping to accelerate adjustment to achieve faster recovery. On one hand, Gaoxin Retail chooses to start with product strength, similar to the prevailing practice in the industry, re-sorting the product structure from the supply chain, trying to make consumers believe in its advantages in price and quality again. The self-operated pork joint procurement in the financial report is a rare highlight. Through centralized procurement, the company achieved "exchanging volume for price," effectively reducing costs. In September this year, self-operated pork sales increased by 20% year-on-year, with gross profit increasing by more than 4 million yuan; in October, gross profit exceeded 10 million yuan. This shows that as long as the scale advantage is mobilized, Gaoxin Retail still has the ability to win back bargaining power and profit space in key livelihood categories. However, this is only a single-point breakthrough. To extend the effect to more categories such as fruits, vegetables, and daily chemicals, it means a comprehensive supply chain transformation. To fully advance this reform requires time and determination. On the channel side, it is accelerating the transformation of online business. Facing the competitive wave of instant retail, Gaoxin Retail is focusing on the front-warehouse model. As of the end of September, the company had built front warehouses in five locations: Shanghai, Jiangyin, Shenyang, Jinan, and Qingyuan. Each warehouse covers about 500 square meters, with an average daily sales of about 50,000 yuan. During the reporting period, online orders increased by 7.4%, providing a slight boost. Management's goal is to increase the online business share to 40% to 50% within three years. This model has both space and risks. The daily sales per warehouse still lags behind leading companies, and the profit model has not yet been verified; front warehouses themselves are capital-intensive investments. Against the backdrop of continued losses in the main business and an 11.7% decline in same-store sales, whether the company has sufficient funds to support nationwide expansion remains a question mark. A bigger test comes from capital patience. As a financial investor, DCP Capital's logic is always "buy, transform, sell." Insiders describe that they look at the financial statements, hoping to sell at a better price after transformation. Now the loss has expanded, thereby compressing the investment cycle. DCP is also continuing to invest in supply chain and digitalization, but there are also voices saying "the investment is too large, and the pressure is not small." Perhaps, from another perspective, this interim report is not an endpoint but a mirror. It reminds the outside world that costs can be saved and losses can be controlled, but to make the company "create blood" again, it depends on capability and patience. In the future, whether Gaoxin Retail can turn "returning to the essence of retail" into real growth depends on whether management can get performance back on track within DCP Capital's investment cycle. Now, the challenge of the times is once again placed before Gaoxin Retail. What it needs to win is no longer its competitors, but its own speed of restart.