Cash Flow Impact Analysis of Xibei's Closure of 102 Stores

Based on the latest public reports and financial information, this article provides a detailed analysis of the impact of Xibei’s closure of 102 stores on its cash flow.

On January 15, 2026, Jia Guolong, founder of Xibei Catering, confirmed that the company will close 102 stores nationwide in one go, accounting for approximately 30% of its total store count, affecting about 4,000 employees [1]. The store closures are mainly concentrated in first- and second-tier cities such as Shanghai (19 stores), Beijing (10 stores), Shenzhen (8 stores), and Guangzhou (5 stores) [1].

According to public information, Xibei is currently facing severe cash flow pressure:

Indicator	Data	Explanation
Accumulated Losses	Over RMB 500 million	Since the pre-made food controversy in September 2025 [1]
November 2025 Revenue	RMB 265 million	Only half of the same period in previous years [1]
Monthly Salary Expenditure	RMB 135 million	Fixed expenditure [1]
Single-Store Net Profit Margin	5%	Extremely meager [1]
Labor Cost Ratio	Over 30%	A significant increase from the previous 25% [2]

Closing 102 stores will improve cash flow in the following aspects:

:

• The store closures are concentrated in first- and second-tier cities, where commercial rents are the highest in the country
• According to industry practices, rent costs for mid-to-high-end catering usually account for 15-25% of revenue
• Assuming an average monthly rent of RMB 150,000-300,000 per store, annual rent savings from 102 stores can reach
  over RMB 180-360 million

:

• Affecting about 4,000 employees, based on an average monthly salary of RMB 6,000-8,000
• Annual labor cost savings are approximately
  RMB 290-380 million

:

• Currently, all 102 stores are operating at a loss
• Timely closure can avoid continuous cash consumption

Proper settlement for approximately 4,000 employees is a significant expense:

• Economic compensation (e.g., using the N+1 standard)
• Social security and housing fund settlement
• Other statutory benefits

• Store equipment disposal or relocation costs
• Penalties (for terminating lease contracts)
• Inventory disposal

To address the crisis, the series of measures adopted by Xibei have further exacerbated cash flow pressure:

Measure	Cost Estimate
No-Threshold RMB 100 Gift Vouchers	Millions of vouchers issued, amounting to over RMB 100 million [1]
“Spend RMB 50, Get RMB 50 Rebate” Subsidy	Large-scale marketing expenditure
Dish Price Reduction (20% on average)	Directly impacts gross profit margin
Employee Allowances	RMB 500 per person + RMB 300-800 per person [1]

• Cash Outflow
  : Employee settlement costs are estimated at RMB 300-500 million
• Cost Savings
  : Annualized rent + labor costs of approximately
  RMB 470-740 million

• Reduce the proportion of fixed costs and optimize the financial structure
• Reduce loss sources and stop continuous cash consumption from approximately 102 stores
• Alleviate the pressure of excessively high labor cost ratio

Based on calculations using existing data, after closing 102 loss-making stores:

Item	Estimated Annualized Impact
Cost Savings	RMB 500-800 million
Loss Reduction	Approximately RMB 200-300 million (based on an average annual loss of RMB 200,000-300,000 per store)
Net Impact	Estimated annualized cash flow improvement of approximately RMB 300-500 million

Xibei’s closure of 102 stores this time is a

strategic contraction [1]. From a cash flow perspective:

1. Significant Loss-Stop Effect
   : Closing loss-making stores can immediately stop continuous cash consumption
2. Cost Structure Optimization
   : Significantly reduce high rent and labor costs in first- and second-tier cities
3. Alleviate Urgent Pressure
   : Against the backdrop of accumulated losses exceeding RMB 500 million and a sharp drop in monthly revenue to RMB 265 million, store closures can effectively improve cash flow conditions

However, it should be noted that even if store closures can improve cash flow, Xibei still needs to face challenges such as brand reputation repair and consumer confidence rebuilding, which require more time to recover.

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[1] Xinhua News - “Xibei to Close 102 Stores on a Large Scale, Concentrated in First- and Second-Tier Cities” (http://www.news.cn/food/20260115/29c72069d9fe44d5985514017b682ea4/c.html)

[2] 21st Century Business Herald - “Xibei Recently Deregistered Multiple Subsidiaries, Jia Guolong Confirms: Will Close 102 Stores” (https://www.21jingji.com/article/20260115/herald/b583287c35211429c202bdfe1a975384.html)

[3] Sina Finance - “Jia Guolong Responds to Store Closures: 102 Stores to Be Closed in the First Quarter, 17,000 Xibei Employees Have Tried Their Best” (https://finance.sina.com.cn/roll/2026-01-15/doc-inhhkwcm7519209.shtml)