After Closing 1,600 Stores, Baiguoyuan (百果园) Struggles to Stem Losses

Results and the retreat

It has been reported that Baiguoyuan (百果园) posted 2025 revenue of ¥8.174 billion, a 20.4% year‑on‑year decline, and a net loss attributable to owners of ¥317 million — narrower than the ¥386 million loss in 2024. The company said second‑half 2025 swung modestly into profit, with H2 attributable net profit implied at roughly ¥24.6 million after a deep first‑half loss. Yet that green shoot arrived only after an unprecedented pruning: store count fell from 6,025 at June 2024 to 4,386 a year later, a net reduction of 1,639 outlets, and only edged up modestly to 4,468 by year‑end.

From scale faith to single‑store focus

Baiguoyuan’s collapse of expansion zeal is striking given its earlier trajectory — the chain took seven years to go from one store to 100, then another seven to reach 1,000, and ambitiously targeted 10,000 stores in 2017. Founder Yu Huiyong (余惠勇) has since signalled public reflection, noting that past playbooks no longer guarantee success. Why close so many stores? Many franchisees faced high rents and falling footfall; management says the retreat was a deliberate “断臂求生” to stop cash bleed and prioritise rebuilding single‑store economics over blind growth.

Operational fixes and experiments

The company is testing several levers to revive margins. Baiguoyuan has adopted a two‑tier product logic — cheap “traffic” SKUs (watermelon, durian) priced aggressively to restore visits, and high‑margin signature fruits to lift profitability; signature fruit sales now account for about 12.8% of sales. It has reportedly rolled out an intelligent ordering system and AI‑driven store diagnostics to cut spoilage and optimise stock, lowered franchise entry costs (basic investment model now ~¥230,000) and sharply reduced franchise fees (from ¥82.17m in 2024 to ¥17.74m in 2025) to revive partner economics. Subsidiary Guoduomei (果多美) is being used as a lab for lower‑tier and flexible formats, and the group says it already operates some 32,000 WeChat communities to boot customer traffic.

Fragile recovery inside a cautious plan

Baiguoyuan plans a conservative net increase of about 200 stores in 2026, prioritising profitability from day one and expansion into lower‑tier cities where rents are cheaper. But risks remain: same‑store daily sales were still down in single digits even as store gross margins ticked up. This is unfolding against a broader backdrop of cooling Chinese consumer retail and tighter financing conditions that have forced many chains to rethink growth‑at‑all‑costs. Can cutting scale and leaning on data and pricing restore the fruit king? For now, the company has stopped the massive haemorrhage — but a full recovery will take much longer.