Alibaba to Sell Stake in Intime

Alibaba Group (NYSE:BABA) announced on Tuesday that it will sell its 99% stake in Chinese department store operator Intime to a consortium that includes Youngor Group and Intime executives. The sale, valued at approximately 7.4 billion yuan ($1 billion), will incur a substantial loss of 9.3 billion yuan ($1.3 billion).

The decision follows a report by Bloomberg regarding the potential deal. Alibaba originally purchased Intime in 2017 for $2.6 billion and had been contemplating a sale earlier this year.

This sale is part of a significant corporate restructuring initiated by Alibaba in 2023, which involved splitting its holdings into six distinct units to concentrate on its most profitable segments, primarily e-commerce and cloud computing.

The exit from Intime is motivated by ongoing challenges in the physical retail sector, exacerbated by a sustained decline in foot traffic amid falling Chinese consumer spending. This trend has negatively affected Alibaba's core operations, reflected in its lackluster quarterly earnings over the last two years.

Additionally, Alibaba is evaluating the sale of its stake in Sun Art Retail Group Ltd (HK:6808), with negotiations currently underway.

Following the announcement of the Intime deal, Alibaba's shares in Hong Kong (HK:9988) dropped by 1.5%.