Breaking: Element Fresh To Close Stores Across China?

Element Fresh issued an internal notice informing management that it will close multiple store across China. It is currently uncertain if the company will close all of its remaining stores, or if the company will be sold to a potential buyer.

The notice, dated 14 December 2021 states that stores have encountered unprecented difficulties since the nationwide epidemic began in January 2020, and that stores were severely affected and have suffered serious losses. It continues to state that the company will begin a "bankruptcy liquidation process," and that it will gradually close Element Fresh stores, the central kitchen, and administrative departments.

Element Fresh, a healthy fast-casual chain, has been operating in China since 2002. According to its website, there are 31 stores in China across 8 cities, Shanghai, Beijing, Hangzhou, Chengdu, Suzhou, Nanjing, Guangzhou, and Shenzhen. However, they've already closed or announced closures for their Kerry Center, Metro City, Yueda 889, Super Brand Mall, and K.Wah locations in Shanghai. A couple stores have also closed in Beijing.

The notice below was initially circulated through Weibo and has been making rounds in WeChat groups. A few Chinese media outlets, including jiemian.com, tech.ifeng.com, and 猎云网 have led with the headlines 新元素破产清算, translating to "Element Fresh Bankruptcy Liquidation."

I reached out to Element Fresh founder, Scott Minoie for comment. He is no longer employed with the company, and therefore can’t officially speak for the business, but has said this:

“The lingering effects of Covid have led to a continual decline in some store sales which has placed enormous pressure on cashflow.  The letter circulating online today is an internal notice sent to restaurant managers to prepare them for more potential closings. The company has not declared bankruptcy; it simply wants to convey the hard truth to valued team members that these are very challenging times. The ownership of the company is looking into several different scenarios, including potential sale. Nothing has been decided yet, we just want to be as transparent as possible with all the employees, partners, customers and suppliers who’ve supported us over the past 20 years.”

It is unclear how long the current stores will remain open or what the company has planned. More on this as the story develops.

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