The encyclopedia · Sales & Retail · Strategic decision · 2009–2023
Hui Lau Shan defined Hong Kong desserts for 60 years — then three owners wore it out
300 mainland stores, three ownership changes in ten years, a Hong Kong winding-up order. By 2023 the last Shenzhen store had closed.
Hui Lau Shan · 2021-05-26
What happened
Hui Lau Shan (许留山) grew from a Hong Kong street cart to the synonym for Hong Kong-style desserts: its mango sago, popular from 1992, made the brand a tourist ritual and a local habit. At its peak it ran about 300 stores in mainland China — 161 self-operated and 112 franchised by 2017 — on dishes priced at ¥30 to ¥60 a serving.
The brand changed hands three times in a decade: sold to Malaysian investors in 2009, to the parent of Huang Ji Huang for HK$500 million in 2015, and with that company to Yum China in 2019. Each owner wanted the franchise fees more than the product: franchise-store daily sales fell from ¥5,503 in 2015 to ¥4,567 in 2017, and the new tea chains — Heytea, Nayuki — took the young customers who had grown up on mango sago and now wanted fruit tea.
The pandemic finished what the ownership churn had started. Hong Kong stores closed over unpaid rent from 2020; landlords in Causeway Bay and Tsim Sha Tsui sued; on 26 May 2021 the Hong Kong High Court issued a winding-up order. The mainland retreat was just as steep — the last Shenzhen store closed in May 2023, leaving 48 nationwide, ten of them already suspended. Search interest in the brand had peaked in 2013–2017 and fallen off a cliff; the stores were closing in the order the customers had left.
Why it happened
- Three owners in ten years each extracted what the brand could pay — franchise expansion diluted the product while the fees went up the chain.
- A signature dish is a moat until the category moves; mango stopped being exclusive, and the new tea chains sold the next generation's version faster.
- Pandemic rent arrears are a cash-flow crisis a healthy brand survives; Hui Lau Shan entered it with falling daily sales and no owner investing in the product.
The lesson
A heritage brand is a stream of rent its owners can collect or reinvest — every year of franchise fees taken instead of product invested is a year the next generation's competitor gets for free.
Sources
spotted an error? The club wants to know.
More like this
Din Tai Fung lost its whole North China network when the license broke
Shangshangqian — Joker Xue's hotpot chain — closed its last store after 14 years
Häagen-Dazs closed 92 China stores in a year — and handed the rest to a tea chain
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.