(Yicai Global) March 20 -- Christine is paying overdue salaries and plans to reopen at the end of May, according to a source at the company, after the much-loved Shanghai bakery chain shut all of its stores in December because of a cash crunch.

“The flagship store has been closed for months, but it is said to reopen on May 30,” the shop’s security guard told Yicai Global. “The company is gradually paying us salaries in arrears for several months,” he added.

Store rents, payments to suppliers, and employee salaries worth about CNY57 million (USD8.3 million) were in arrears as of Feb. 28, Christine said on March 10. Some CNY3.5 million to CNY4 million (USD507,585 to USD580,100) of assets had been frozen, so it had to replenish its cash flow through loans, asset sales, and other means, the firm said.

The collapse of some time-honored brands is partly due to the Covid-19 outbreaks, but it is also because of their lack of innovation, rigid way of doing things, and aging team, said food industry analyst Zhu Danpeng.

There is nobody in Christine’s flagship store, but some dusty cake boxes are still on the counter by the display window. On the wall, there is a notice stating that the company failed to pay the rent for about half a year, owing the landlord CNY121,600 (USD17,620). Christine’s office, which is on the third and fourth floors of the same building, is also empty.

Founded in 1993, Christine makes Chinese and Western-style cakes and bread and operates in the Yangtze River Delta region. The business went public in Hong Kong in 2012, but suffered losses in the following nine years.

Christine had a net loss of about CNY73 million (USD10.6 million) in the first half of last year, after it shut down 271 outlets between 2019 and 2021.

Christine’s shares [HKG: 1210] finished unchanged at 6.9 Hong Kong cents (0.9 US cents) each in Hong Kong today.

Editors: Zhang Yushuo, Futura Costaglione