"First Stock of Home Retail" Red Star Macalline (红星美凯龙) Posts RMB 24.09 Billion Loss, Diversifies into Appliances, Cars and Catering to Survive

Massive quarterly swing: a collapse in profits

Red Star Macalline (红星美凯龙) (601828, SH; 01528, HK) reported a dramatic deterioration in its 2025 results, with a net loss attributable to owners of RMB 24.09 billion (240.937 亿元), up roughly 590% from 2024. Revenue fell 15.8% to RMB 6.58 billion (65.819 亿元) and gross profit slipped to RMB 4.23 billion (42.297 亿元). Per-share loss widened to RMB 5.53 from RMB 0.80 the prior year. For a company once touted in 2015 as the "first stock of China's home retail industry," the numbers mark a striking reversal.

Shrinking footprint and stressed mall economics

The company blamed the protracted slowdown in China’s property market and weakening demand in home and building materials for the hit. It has been reported that total mall count fell by 42 sites year‑on‑year, with managed malls down sharply and total operating area shrinking by nearly 2 million square metres. Rental and management income were hit as the group waived or discounted fees to retain tenants and offered aggressive commercial terms to attract brands, pressuring rental yields and footfall across its retail ecosystem.

Loss drivers and a bruised business mix

Some business lines are particularly loss‑making. Construction and decoration services posted a sharp negative margin (from 14.8% to -43.6%), suggesting those projects are effectively subsidising traffic rather than delivering profits. Managed malls, by contrast, showed relatively higher margins and pulled up the group’s consolidated gross margin slightly. But the overall trend is clear: the post‑2019 revenue peak has reversed into a multi‑year decline and now a deep loss.

A survival playbook: new formats and second growth curve

To arrest the slide, Red Star Macalline is repositioning itself as a "home life new commercial operator and home industry ecosystem service provider." The remedies are diverse: MEGA‑E appliance halls, offline channels for new‑retail furniture, M+ high‑end design centres, expanded auto retail space, enhanced dining and lifestyle offerings, and even senior‑living themed outlets in Shanghai. It is a bold pivot. But can selling appliances, cars and food turn a company built on mall rents back into a growth story? Investors and retailers will be watching closely.