What Do Nayuki Store Closures Mean for Coffee Growth?

Nayuki has closed stores in Xi'an, Changsha, Dalian, Jining and Tai'an, and the Tai'an closure ends its presence in that city. The tea chain reported cumulative losses of roughly 1.465 billion to 1.555 billion yuan across four years, its share price fell more than 20%, and it was removed from the Stock Connect list.

Closures began spreading nationwide late last year, hitting both city first stores open under a year and mature outlets with loyal customers. Competition and shifting consumer habits drive the pressure, and the company's response through product innovation is being watched as a signal for coffee growth and the wider freshly made drinks environment.

Recently, many consumers have noticed that Nayuki stores around them have quietly closed without any warning, with the original locations being taken over by other brands. Judging from feedback on social platforms, Nayuki stores in multiple cities including Xi'an, Changsha, Dalian, Jining, and Tai'an have successively withdrawn, with the closure of the Tai'an store meaning the brand has completely exited the local market. At the same time, Nayuki's stock price plummeted by over 20% and was removed from the Stock Connect list, triggering widespread discussion about its business condition. As the once glorious "first stock of new tea drinks," Nayuki has only achieved meager profits in one year out of four since going public, with cumulative losses of approximately 1.465 billion to 1.555 billion yuan. Facing intensified competition and changing consumption trends, whether Nayuki can overcome its difficulties through product innovation has become a focus of industry attention.

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Recently, many netizens have noticed while shopping at local major shopping malls that Nayuki stores that once occupied prominent positions have quietly withdrawn, with the original spaces now covered by promotional materials from other brands, and the once-iconic green signage nowhere to be found.

According to posts published by netizens on social platforms, the Xi'an Joy City store in Shaanxi, the Changsha Bubugao Meixi New World store in Hunan, the Dalian Huanan Yihe City store in Liaoning, the Jining Longgui Shopping Plaza store in Shandong, and the Tai'an Taiwen Wuyue Plaza store in Shandong have all been successively closed. Among them, the closure of the Taiwen Wuyue Plaza store means Nayuki no longer has any stores in that city.

Seeing Nayuki silently disappear from their cities, local consumers have expressed surprise. But in reality, Nayuki's wave of store closures began spreading across the country since the end of last year, with many stores suddenly disappearing from the official mini-program one day, and by the time consumers visited in person, the signage had already been replaced by another brand. Among these closed stores, there were both city first stores that had been open for less than a year, and mature stores that had been operating for a longer time and accumulated many loyal customers. It is worth noting that most of them were directly operated stores.

As for the reasons for the successive store withdrawals, they are nothing more than common objective factors such as contract expiration and rent increases. However, some views suggest that Nayuki may have recently reduced its store size or closed some directly operated stores in order to cut operating costs. In the eyes of these people, it is normal business behavior for a brand to appropriately adjust its layout according to the current market environment, and the public need not worry simply because the official side has closed a few stores.

However, just a few days ago, Nayuki's stock price plummeted by more than 20%, and compared with the IPO issue price of HK$19.8 per share, the decline has reached 93.4%. Its market value has shrunk from 30 billion yuan at the time of listing to 2.2 billion yuan now, evaporating more than 90%.

At the same time, on March 10, the adjustment results for Stock Connect targets under the Shenzhen-Hong Kong and Shanghai-Hong Kong Stock Connect officially took effect, and Nayuki's name appeared on the list of those removed from Stock Connect. Although professionals have pointed out that Nayuki being removed from Stock Connect does not mean the brand has fallen into an economic crisis, this news still dealt a considerable blow to its stock price and also caused concern among people paying attention to Nayuki's development.

In the public impression, Nayuki was once enormously glamorous. When it was listed on the Hong Kong Stock Exchange in 2021 as the "first stock of new tea drinks," it attracted countless attention, and many investors were full of expectations for its future prospects.

However, in recent years, Nayuki has not continued to bring investors considerable returns as the outside world had hoped. On the contrary, during the four years since going public, the company achieved only a slight profit in one year, and was in a loss-making state the rest of the time. Based on the profit and loss data published by the company, Nayuki's cumulative losses over these years amount to approximately 1.465 billion to 1.555 billion yuan.

In addition to losses, compared with peer competitors, Nayuki has not been fast in store expansion. Now, in order to reduce losses, it is continuously closing stores and withdrawing from high-rent shopping malls, which makes it hard for many fans not to worry about its future direction.

However, some optimistic people believe that as consumers pay increasing attention to health, Nayuki has successively launched products such as fruit and vegetable juices and light meals in response to market demand, which may allow it to find new profit growth points in the rapidly changing consumer market and thereby reverse the current difficult situation that is not favored by various parties.

Image source: internet screenshot

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The above content is compiled by CoffeeHunters, a coffee news website.