Cailian new consumption daily (reporter Li Danyu Ao Jin) - in April 2020, Ruixing revealed that false transactions fell to the bottom from the star company with the fastest IPO, which triggered a series of chain reactions: stock price plummeted, delisting, class action, punishment by regulatory authorities

But it took two years for Ruixing to realize the overall reversal of the situation.

According to the third quarter financial report released by Ruixing in December 2021, the total net income of Ruixing coffee in the third quarter of 2021 was 2.352 billion yuan, a year-on-year increase of 105.6%; The net loss was 23.5 million yuan, a year-on-year decrease of 98.6%; The average monthly trading customers were 14.7 million, a year-on-year increase of 79.2%; Store operating profit margin increased to more than 25%.

During the Beijing Winter Olympics, valley ailing, a “bet”, also made Ruixing hot again, and young consumers continue to regard it as the first choice of cost-effective coffee. Ruixing seems to have stepped out of the impact of the storm of “financial fraud”, and its reputation has gradually changed from cheap to cost-effective. Behind this, the management led by Dazheng capital and pleasure capital has played a great role in promoting.

During this period, after a long-term game among Ruixing coffee’s internal management, shareholders and investors, Ruixing coffee finally took a series of self-help measures, including adjusting the board of directors and senior management, solving litigation problems, closing stores with serious losses, etc.

On January 27, 2022, Dazheng capital announced that the buyer group led by Dazheng capital has completed the acquisition of some shareholders’ equity of Ruixing coffee, and other members of the buyer group include IDG capital and Ares SSG capital management. After the completion of the transaction, Ruixing will hold more than 30% of the equity and more than 50% of the voting rights and become the controlling shareholder.

With the change of management, the entry of Dazheng capital and the exit of Lu Zhengyao’s forces, Ruixing, who advocates fine operation, management and precision marketing, is stepping out of the negative impact of the storm of “financial fraud”.

But the industry is also predicting the fate of Ruixing in 2022: can it return to NASDAQ?

The management seized power and changed blood, and Lu Zhengyao’s forces were out

After Ruixing’s financial fraud, the management began to shuffle. Guo Jinyi replaced Lu Zhengyao as the chairman and CEO of Ruixing. In January 2021, unwilling Lu Zhengyao led seven vice presidents, five directors and 34 regional managers of Ruixing to jointly write a letter of removal, asking for the removal of Guo Jinyi.

Guo Jinyi then fought back, saying that the joint letter was a former executive organization such as Lu Zhengyao and Qian Zhiya. Some of the employees involved did not know the truth and were coerced to sign. The management dispute ended in the victory of Guo Jinyi with the support of the management.

Wang Chen, a former employee of Ruixing coffee, told reporters that after the battle, many middle and senior managers left. This exchange of blood basically completed Guo Jin’s control of the core team.

At that time, the media said that Ruixing coffee technology team was poached by Lu Zhengyao on a large scale. Even Guo Jinyi mentioned “malicious poaching” in his letter. According to media reports, in December 2020, more than 300 employees of Ruixing coffee’s Xiamen headquarters received a notice that they needed to “change their visas” to transfer their labor relations to Lu Zhengyao’s new company.

At the beginning of 2022, the management storm fell behind. Dazheng capital strongly announced that the buyer group led by Dazheng capital had completed the purchase of 383425748 class a ordinary shares of Ruixing coffee. After the transaction is completed, it will hold more than 30% equity and more than 50% voting rights of Ruixing coffee and become the controlling shareholder. This also means that Dazheng capital entered Ruixing and Lu Zhengyao was completely out of debt liquidation.

“Everyone in the company knows that Guo Jinyi is a boss representing the management, which also brings about the relative stability of the management. After the last incident, many colleagues doubt Ruixing’s management ability, but now, Ruixing is a normal company.” Shen Tao, an employee of Ruixing, told reporters that the year-end bonus will be paid normally this year. Excluding the optimized employees, it is basically about 1-4 months.

After the change of management: from money burning subsidy to refined store operation?

During the period when Lu Zhengyao’s senior executives were in charge of Ruixing, Ruixing’s strategy was to sign stores at a high price in order to expand rapidly, but most of the leases were about three years. Compared with Starbucks and other coffee shops in the industry, the lease is about 10 years.

In fact, to the surprise of the outside world, Ruixing did not have a large-scale shutdown after the “counterfeiting incident”. Many of these stores are automatically closed due to the expiration of the lease.

At the same time, Ruixing suspended the business layout related to unmanned retail and began to significantly increase the number of franchise stores in order to reduce costs. It is reported that Ruixing does not charge franchise fees from franchise stores, but takes the way of revenue pumping. That is, the monthly turnover of more than 20000 yuan is drawn in steps, with the proportion ranging from 10% to 40%. If the turnover of the current month exceeds 80000 yuan, the franchise store needs to pay 40% of the “service management fee”.

Based on the financial data released by Ruixing, the scale of its direct stores has been maintained within 4500 for a long time, and its expansion at this stage mainly depends on franchise stores.

According to the third quarterly report of Ruixing in 2021, by the end of the third quarter, Ruixing had 5671 stores nationwide, including 4206 self operated stores and 1465 franchise stores, with a year-on-year increase of 6.4% and 66.7% respectively.

Not long ago, Guo Jin, chairman and CEO of Ruixing coffee, issued an internal letter to 20000 employees of Ruixing. According to the internal letter, in January this year, Ruixing opened about 360 new stores, setting a new record for Ruixing’s total number of stores in a single month. The turnover of stores during the Spring Festival Golden Week was three times that of the same period last year.

According to the new consumption daily, although it is still expanding at this stage, Ruixing’s management is also cautious about the expansion of franchise stores.

According to the owner of Ruixing franchise store, Ruixing franchise has been suspended in many cities, and the consulting staff said that the quota in the current city is full. But in fact, Ruixing is deliberately controlling the number of franchise stores and only gives them to the joint venture partners in the system.

“When Ruixing is only one step away from profitability, it starts to tighten its franchise, or hopes not to lose the control ability of stores and affect its return to the main board in the future.” Shen Tao told reporters that we noticed that on the social platform, some consumers showed that the coffee production and even capacity of some alliance stores were inconsistent with the regulations, which was not conducive to the development of Ruixing brand.

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