Gourmet Master Co (美食達人), which operates cafe and bakery chain 85°C (85度C) in Taiwan and overseas, yesterday said it shut down 14 outlets in China last quarter to cope with the vast consumer market’s lackluster recovery in the post-COVID-19-pandemic era.
Gourmet Master sought to play down the move as normal business adjustments to keep its economic scale optimal, rather than massive closures or intentions to pull out of China, its largest source of revenue.
Revenue contributions from China grew 3 percent in the first three quarters of this year, although its overall share declined to 51 percent from a peak of 72 percent in 2014, it said.
Photo courtesy of Gourmet Master Co
“It is common for restaurant brands to adjust product lines and portfolios to strengthen operational efficiency in a competitive market such as China,” the company said.
Gourmet Master said it reviews the financial performance of every outlet on a quarterly basis.
The Chinese market lagged behind expectations after emerging from pandemic restrictions, but the company would not abandon the market it entered in 2007, it said.
As of September, Gourmet Master operated 440 stores in Taiwan, 71 in the US, six in Hong Kong and 575 in China.
Analysts said Gourmet Master might shut another 15 shops in China this quarter and stand by a cautious approach next year to improve its profitability.
Sales in China last month declined 5.8 percent year-on-year to NT$1.6 billion (US$50.88 million) but expanded by double-digit percentages in the US market, company data showed.
The figures indicated that operations in China have dragged on profits for the company, which said it had no expansion plans in the country while customers remain conservative about spending.
Net profit increased 38.62 percent year-on-year to NT$228.66 million during the July-to-September period, or earnings per share (EPS) of NT$1.27. Cumulative net profit in the first three quarters more than doubled to NT$741.28 million, or EPS of NT$4.12.
In contrast to China, Gourmet Master said it would open new stores in the US from this quarter, as operations there have a higher profit margin over its Chinese and Taiwanese operations.
Net profit for the US market last quarter rose 18 percent annually to NT$1.78 billion.
“That market still poses ample growth potential,” it said.
STEADY: Prices are to rebound following inventory rebuilding demand, TrendForce said, with Samsung Electronics Co further trimming capacity as it slashes DDR4 lines The contract prices of DRAM chips are to rise by as much as 18 percent sequentially this quarter — the first price upticks in about eight quarters — driven mainly by inventory rebuilding demand for DRAM chips used in mobile devices and PCs, TrendForce Corp (集邦科技) projected yesterday. The price rebound is led by a quarterly increase of mobile DRAM chips, which are to climb between 13 percent and 18 percent quarter-on-quarter this quarter, which has not been seen since the fourth quarter of 2021, the Taipei-based market researcher predicted. Likewise, the price of mainstream PC DDR4 DRAM is expected to bounce
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime
A Hong Kong court postponed a court hearing on troubled Chinese property developer Evergrande Group’s (恆大集團) winding-up petition scheduled for yesterday until Jan. 29. Evergrande is trying to win support from its creditors for a plan to restructure more than US$300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan. The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan (陳靜芬) had said in October that yesterday’s hearing would be the last before a decision is handed down. Chan
Huawei Technologies Co (華為) is among a field of “very formidable” competitors to Nvidia Corp in the race to produce the best artificial intelligence (AI) chips, Nvidia chief executive officer Jensen Huang (黃仁勳) said yesterday. Huawei, Intel Corp and an expanding group of semiconductor start-ups pose a stiff challenge to Nvidia’s dominant position in the market for AI accelerators, Huang told reporters in Singapore. Shenzhen-based Huawei has grown into China’s chip tech champion and returned to the spotlight this year with an advanced made-in-China smartphone processor. “We have a lot of competitors, in China and outside China,” Huang said. “Most of our competitors