Christine’s Lost Decade: How China’s First Listed Bakery Chain Shrunk After Its IPO

This is an English adaptation of a FoodBud historical article originally published on May 13, 2022.

Christine may no longer be a familiar name to many operators, but it was once China’s first listed bakery chain. At its peak, the company reportedly used 10 tonnes of flour a day and operated more than 1,000 directly owned stores nationwide.

Founder Luo Tian’an originally made his living selling jeans in Taiwan. In his early 20s, he bought imported jeans from sailors returning through Keelung and resold them in local markets. Because imported jeans were still uncommon in Taiwan at the time, that business gave him his first significant earnings.

After investment losses during the 1997 Asian financial crisis left him in debt, Luo moved to mainland China to look for a new opportunity in Shanghai. He had previously invested in Shanghai Lianquan Food, the predecessor of Christine, while running his jeans business. What had started as a side investment became the foundation for his turnaround.

At the time, Western-style pastries were not yet widely available in Shanghai. Christine used a central-kitchen production model to supply bread, mooncakes, cakes and other products quickly and at scale. Its mooncake vouchers became especially popular, helped by the Chinese gift-giving tradition around holidays.

A decade of decline after listing

Founded in 1993, Christine listed on the Hong Kong Stock Exchange in 2012, around its 20th anniversary, becoming known as China’s first listed bakery company.

During its 2011-2013 peak, annual revenue was close to RMB 1.4 billion. Revenue began to edge down in 2013, and that same year the company started posting net losses. From then on, it lost money every year.

Other operating indicators also deteriorated:

• Gross margin declined for 10 consecutive years.
• Inventory turnover days rose from 17 days in 2011 to 40 days in 2021.
• Store count peaked at 1,052 in 2013.
• Closures began in 2014 and continued through 2022.
• By the end of 2021, the chain had 320 stores.
• According to Christine’s website at the time of the article, the store count had fallen to 308.

For Christine, the decade after listing was a period of fading brand momentum. Other established bakery chains such as 85°C, BreadTalk and Arome Bakery were also losing some momentum. Arome’s decline was especially severe: in 2021, the 26-year-old bakery brand announced it would permanently close.

Meanwhile, local brands such as Holiland remained resilient, and newer bakery brands attracted significant capital-market funding in the years before the article was published.

Governance conflict drained management focus

By the time of the article, Christine’s market capitalization had fallen below HKD 100 million, making it a Hong Kong penny stock.

After years of losses, Christine also became mired in internal disputes. In November 2017, founder Luo Tian’an was removed from his board seat. He also ceased to serve as board chairman, chairman of the strategy and investment committee, and member of the remuneration and nomination committees.

In November 2018, Christine announced that Zhu Yongning had been appointed executive director and chief executive officer, while Luo stepped down as CEO.

The dispute continued. In July 2019, Christine said it had received a written request from Sino Century Universal Corporation to immediately appoint Luo Tian’an, Luo Shengjie and Lin Guowei as executive directors, appoint Qin Hua as independent non-executive director, and remove Zhan Yisheng, Xu Zhiming, Zhu Yongning and Chen Shi as directors.

The requesting party held 18.24% of Christine’s issued share capital. Public information cited in the article said Sino Century Universal Corporation was wholly owned by Goyen Investments Ltd., which was wholly owned by Luo Tian’an, and that Qin Hua was Luo’s spouse. The proposal was rejected, with opposing votes reaching 55.4026%.

In May 2020, Luo submitted a real-name complaint letter to the Hong Kong Stock Exchange. In the letter, he alleged that executive director Zhu Yongning had obtained equity and voting rights through illegal means.

Luo also pointed to unusual volatility in Christine’s stock between May 11 and May 15, 2020. He argued that Zhu was buying shares, mainly through Kingston Securities, to increase voting power ahead of a May 21, 2020 extraordinary general meeting and avoid the removal of two directors.

Luo said the repeated governance battles after listing had dragged Christine down. Zhu rejected Luo’s accusations, saying Luo was dishonest and that the claims were lies.

From May 2020, Xu Chunbin became Christine’s group chairman while also serving as CEO. In Christine’s 2021 annual report, the company noted that concentrating the chairman and CEO roles in one person was not conducive to checks and balances. The board said it was still actively looking for suitable operations-experienced personnel to ensure a balanced distribution of power and authorization.

Although Luo no longer held any position at Christine, he said he still needed to step in to resolve supplier-related issues. In his view, Christine’s decline was not primarily caused by poor operations, but by internal conflict that consumed much of the company’s energy.

The broader operating lesson is clear for chain operators: governance and top-level management alignment matter. In Christine’s case, years of internal conflict coincided with a missed decade of rapid growth in China’s bakery market.

Note: IPO, market-capitalization, shareholding and forward-looking governance figures are historical, based on the article’s May 13, 2022 context.