(Yicai Global) May 13 -- Chinese restaurant chain Jiumaojiu Group plans to shut down its Jiumaojiu restaurants in Beijing, Tianjin and Wuhan and close eateries in other cities that are suffering lower sales as a result of the Covid-19 pandemic.

The group’s restaurants under other brands will remain unaffected, the Guangzhou-based company said in a statement yesterday.

Jiumaojiu Group is trying to cut costs of rent, materials, consumables and other operating expenses, the statement added, saying store closures was one of the ways it would reduce outgoings.

The firm did not specify how many stores it will close or how many employees it will let go, but it had six Jiumaojiu outlets each in Beijing and Tianjin and 10 in Wuhan as of the end of June, according to the company website. Most of its remaining restaurants are in Guangdong province.

Shares in Jiumaojiu Group [HKG:9922] started 4 percent lower today but clawed back to close at HKD11.80 (USD1.52), down 1.17 percent. The benchmark Hang Seng Index lost 0.27 percent during the day.

Founded in 1995, the company listed in January and raised around HKD2.1 billion (USD271 million). It also owns the Tai Er Chinese Sauerkraut Fish brand, among others.
It had planned to use the money raised in the public offering to open 38 new Jiumaojiu restaurants, 180 Tai Er restaurants and 60 other eateries this year and next, according to its prospectus, and the latest statement said it still plans to do the same, although the pandemic may set back the plans somewhat.

Editor: James Boynton