Haidilao to close or suspend around 300 restaurants by end-2021
Affected employees would be redeployed within the group.
Hot pot chain Haidilao is shutting down or suspending the operations of around 300 poorly performing restaurants, after aggressively expanding in the past two years.
In an exchange filing on November 5, the Hong Kong-listed company said some restaurants will be temporarily closed for no more than two years, and resume operations "in appropriate times".
No employees will be laid off, whilst affected employees will be redeployed within the group.
As of end-June, the hot pot giant has 1,597 restaurants in operation globally, with 1,491 of them in mainland China—an over 70% jump over the 935 restaurants it had globally, including 868 in mainland China the year prior.
In an interim report published in September, Haidilao cited time taken for newly opened restaurants to hit their first break-even amidst the pandemic as one of the factors affecting its performance in the first half of this year.
Whilst the group had higher revenue and profit during the first half of this year compared with the prior-year period, the chain noted that table turnover rate was 3.0 times per day, down from 3.3 times per day for the corresponding period.
Haidilao added in its exchange filing that it has decided to launch a plan, dubbed Woodpecker, to improve operating performance. Initiatives include paying attention to the restaurants with unsatisfactory operating results, including overseas restaurants, and taking improvement measures accordingly.
The group will also be slowing down its business expansion plans.
"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,” it said.