Bai Fu Holdings Wang Xiaolong: The Catering Industry Is Facing A Cash Flow Crisis. To Reduce Expenditure, We Must Take The Initiative To Attack.

"As soon as the epidemic was announced, I had no leisure for the whole spring festival. From the twelfth lunar month twenty-nine to the new year's Eve, I deployed my mask to the mall during the deployment of the work. Seeing that the flow of people is decreasing, I believe that this is a tough battle for the catering industry. In February 2nd, Hirotake, managing director of investment and CEO Wang Xiaolong, said in an interview with the economic report in twenty-first Century.

During the SARS period, I studied in Tsinghua University. Due to the seriousness of the epidemic, the school gates of Tsinghua University were closed. At that time, I lived outside school, and I couldn't get to school. Because I can hardly find restaurants outside the door, I get noodles and instant noodles every day, which is very difficult. " Wang Xiaolong recalls.

Later, when the SARS was about to end, Wang Xiaolong could not help calling several good classmates and wearing masks to go to the restaurant that was still open for business. There are many more waiters than customers. The waiter stood there, and even looked at the group of diners who were brave enough to eat.

17 years later, Wang Xiaolong, a 100 CEO holding company, spent an unconventional Spring Festival because of the epidemic. Bai Fu holdings is a platform for Hongyi's systematic investment layout and operation management in the catering field. It has invested in more than 10 catering brands, including meeting small noodle, Western Master, and he valley. Prior to the establishment of Bai Fu holdings, Hirotake also bought PizzaExpress, a British restaurant brand, and invested in the power of Jincheng and Quan Wei.

Most of the brands are located in Beijing and Shenzhen. After Wang Xiaolong made early warning and epidemic prevention arrangements for Beijing's catering brand, he left for Shenzhen in January 22nd at the twenty-eight of the twelfth lunar month.

During his five or six days in Shenzhen, Wang Xiaolong wore a mask to the shopping mall near his home to observe the flow of people, the operation of his own business, and the response of others. Seeing that the situation is even more serious than expected, Wang Xiaolong led a hundred series of coping strategies for Pak Fu and its catering enterprises: executives took the initiative to stop pay or reduce wages, all new store plans were suspended, key efforts were taken to take away channels, positive vaccination was carried out and appealed for preferential policy support.

The epidemic has accelerated the trend of shuffling in the catering industry. Wang Xiaolong believes that the future will eventually belong to those excellent brands in terms of convenience, safety, cost performance and meticulous management.

Catering industry faces cash flow crisis

Twenty-first Century: what are the main impacts of the epidemic on the catering industry?

Wang Xiaolong: in the short term, the direct impact is that because restaurants do not encourage meals and other factors, there is almost no business in the restaurants, which is down by 80%-90% compared with the past. Only a small number of takeaway are still in operation, but there are also problems with takeaway. For example, people are worried about its safety and whether there will be health risks.

Many enterprises hoarded a large number of ingredients during the Spring Festival, but because the epidemic was too fast, many foods could not digest, which caused huge losses. At the same time, business operations include labor, rent, loans and other expenses. Some developers offered to reduce rent, but a small amount.

"Twenty-first Century": Jia Guolong, chairman of Xibei, said in an interview earlier that the loan payment may only last three months. What is the cash flow situation of Pak Fu's catering enterprises?

Wang Xiaolong: the whole Hongyi and Pai Fu restaurants have more than ten brands, and the annual revenue scale is similar to that of Xibei. But half of our stores are overseas, and there are nearly 600 stores in China. The total annual revenue scale is three to four billion. For some of the brands, they have normal control and accumulation. If I cut down my expenses immediately and cut corners quickly, I think it will take three months.

For some small brands, the pressure is even greater. Because they are in their growth stage and investment period, hematopoietic function is not enough to cover all kinds of input in infrastructure and personnel. For them, cash flow is enough to support one or two months. Of course, positive measures are being taken now. As a listed company, Pak Fu will play the synergy and capital advantage of the group army, and strive to coordinate resources and help all brands tide over difficulties.

To reduce expenditure, we must take the initiative to attack.

Twenty-first Century: in order to cope with the current situation, what measures have been taken by Pak Fu and its catering enterprises?

Wang Xiaolong: our reaction is relatively fast. In January 20th, Zhong Nanshan talked about the pneumonia epidemic of the new coronavirus infection. It was affirmative. For the first time, I warned the owners of the catering enterprises in the WeChat work group, hoping that everyone would be prepared for the worst and formulate their own coping strategies.

To ensure the safety and health of employees and customers is our first consideration. Therefore, the first time we respond to the government's call, we must close more than 400 stores quickly and reduce the spread of the epidemic so as to keep the staff waiting as far as possible.

At the same time, we also adopted an unconventional approach very quickly to increase revenue and reduce expenditure. The human cost of catering enterprises is relatively important, but we will try not to lay off workers. First of all, we can get through the difficulties with the company through the management of pay and salary cuts. After discussing with CEO and COO and CFO, I decided to suspend salary for three months starting in February. The remuneration at the director level is halved, and some other colleagues volunteer to take their vacation according to their workload.

Most of the restaurant brands in Bai Fu were in Beijing and Shenzhen. After the early warning and arrangement of local brands in Beijing, I stayed in Shenzhen for five or six days in the evening of January 22nd, and discussed the coping strategies with our local catering brands.

Their reaction is also very fast. They decide to live immediately as the most important goal and adopt a series of measures to save themselves. First of all, we should reduce all expenditure and postpone all investments. All the new shops will be suspended, all foreign recruitment will be suspended, and management staff will begin to stop paying and reduce salaries.

Second, we have to take the initiative to attack, think of ways to add pounds to take away, and let consumers rest assured. Some of our brands began to offer takeaway for family packages, and stores began to buy personal protective tools such as medical masks, thermometers, disinfectant and other personal protective tools for employees, and equipped with professional thermometers to measure temperature for customers. As of January 24th New Year's Eve, 14 brands of Hirotake and Bai Fu's brand PizzaMarzano, he he Gu, new hot fish pot and so on have already completed the purchase of the epidemic prevention and control tools in the store and the training of staff prevention and control, and sent an epidemic prevention complaint to the community through the WeChat public number and micro-blog.

Twenty-first Century: according to the current situation, will Hongyi and Bai Fu adjust their investment strategies in the catering field?

Wang Xiaolong: in the long run, we will not stop investing in the catering industry. In the short term, our focus now is to make the existing brands well and tide over difficulties together.

Because, first of all, the catering industry has a strong rigid demand, and now it is a scale of four to five trillion yuan. Ten years later, it is likely to be 10 billion cubic meters of volume. This is a pillar industry.

Second, the Chinese catering industry largely represents the catering culture of China, and is the most classic representative of Chinese traditional culture. And the road of internationalization has begun to emerge. Globalization is inevitable. So we firmly invest in the catering industry.

Third, even if the epidemic does not come, the industry will also have the trend of shuffling. This epidemic has accelerated the shuffle. We believe that there will be a number of excellent brands, which are excellent in terms of convenience, safety, cost performance, and meticulous management, and their ability to resist risks is very strong. We will intensify our efforts to support the rapid development of brands.

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