Haidilao a victim of Covid-19, to close or suspend 300 stores
SINGAPORE (THE BUSINESS TIMES) Hot pot chain giant Haidilao International Holding said it will be shutting down or suspending the operations of around 300 poorly performing restaurants, after having expanded aggressively in the last two years .
No employees will be laid off, and affected employees would be redeployed within the group.
The closures will reportedly affect mainly outlets in China, thought some cuts will come in countries where the restaurant has expanded into.
This was more than a 70 per cent increase over the 935 restaurants globally, including 868 in mainland China, it was operating as at end June 2020.
The operations of restaurants were also still suffering from the continuing impact of Covid 19 pandemic.
The operating performance was not up to the management's expectation, reflecting that the internal management and operation need to be corrected and improved on a best effort basis, Haidilao said in the report.
For the year to Friday, when the shares closed at HK$21.05, the counter is down nearly 65 per cent.
The group will also be slowing down its business expansion plans.
It said If the average table turnover rate of Haidilao restaurants of the group is less than 4 times per day, no new Haidilao restaurants will be opened on a large scale in principle.
• With additional information from The Straits Times