From the first Chinese hot pot stock to privatization and delisting, the glory and decline of Inner Mongolia Little Sheep

As the saying goes, "Thirty years in the east, thirty years in the west", in the unpredictable field of catering, no one will know, today's successful restaurant brands, and tomorrow why they will fall. Last week, we talked about the story of the start of the Little Tail Sheep hot pot in Inner Mongolia, today, I will take you to pick up another "sheep" from Inner Mongolia in the restaurant world of the ups and downs.

#Negoti headlines# #Xiaofeiyang# In November 1964, Zhang Gang, the founder of Xiaofeiyang, was born. Zhang Gang's parents were both Baosteel workers, which predestined him to have a close relationship with Baosteel. 1981, Zhang Gang entered Baosteel Technical School, and three years later, after graduating from the school, Zhang Gang was assigned to the sintering workshop as a sinterer, as promised.

From the first Chinese hot pot stock to privatization and delisting, the glory and decline of Inner Mongolia Little Sheep

In 1988, the "iron rice bowl" still failed to retain the ambitious Zhang Gang, who had been working as a full-time fireman for two years. In 1988, Zhang Gang, who had been a full-time fireman for two years, took a leave of absence from his job and started to go into business.

In 1995, Zhang Ningping (now one of the shareholders of Little Sheep) borrowed money from Zhang Gang to do the cell phone business, at that time, Zhang Gang was eager to change his business, and after a little understanding of this business, he joined Zhang Ningping's cell phone business.

At that time, Baotou area, a cell phone distribution department named Huida Feng, is their store, Huida Feng cell phone business at its best when a day can earn 10,000 yuan. Business is booming inevitably someone to follow the trend, gradually, the Baotou area, more cell phone stores, Huida Feng profits plummeted, after further consideration, Zhang Gang decided to give up the cell phone business, continue to find another way out.

At the beginning of 1998, introduced by a friend, Zhang Gang started to do information desk again. After the first information desk opened in Baotou, Zhang Gang opened three more in BAMU, XIMU and Tongliao. Later, all over the world have Zhang Gang information desk business, which also inevitably have to travel often. In a business trip, Zhang Gang tasted a hot pot that can be eaten directly without dipping, and at that time Zhang Gang in Tongliao also often eat a lamb hot pot without dipping small ingredients, the two eat very similar, which also made Zhang Gang aware of the business of such hot pot, the opportunity to spend money to buy the boss's recipe.

After bringing back the recipe, Zhang Gang's brother-in-law, uncle and other people have joined the hot pot soup research. August 8, 1999, "Little Sheep" hot pot store officially opened in Baotou, Zhang Gang and former friends Chen Hongkai became the original founder of Little Sheep. It is reported that the opening of the Little Sheep, the first store less than 50 square meters, only 6 tables, this "do not dip small ingredients to eat hot pot" the unique taste of the store opened only three days was "crowded".

From the first Chinese hot pot stock to privatization and delisting, the glory and decline of Inner Mongolia Little Sheep

In October 1999, the second branch of Little Sheep in Baotou was opened, and all the lamb of Little Sheep was replaced with lamb meat, which is delicious plus secret pot base, plus not dipped in small ingredients, soon, Zhang Gang's Little Sheep opened up the market, and by 2002, the turnover of Little Sheep reached 2.5 billion yuan.

Since 2003, Little Sheep has been ranked second in China's local restaurant industry in terms of turnover for three consecutive years after China Yum! How fierce was the development of Little Sheep at that time? It is reported that the Little Sheep, which was founded only 3 years ago, has opened 600 stores across the country, and no brand has been able to surpass it so far, and in its heyday, the annual turnover of Little Sheep exceeded 5 billion.

After that, for the development of Little Sheep, Zhang Gang began to give up his shares and started to introduce talents, and Sun Xianhong, the then vice president of Mengniu, and Lu Wenbin, who was in charge of capital operation in Mengniu, became shareholders of Little Sheep. The number of shareholders in Little Sheep's branches around the world exceeded 500, and Little Sheep stores were located in Taiwan, Hong Kong, North America, Japan and so on, with the number of stores reaching 720.

The rapid expansion of Little Sheep soon attracted the entry of capital, and it was foreign capital.

In June 2006, Little Sheep reached a US$25 million investment agreement with venture capital firms 3i Private Equity and Pukai Investment Fund of Spain, which jointly held a 13.92% stake in Little Sheep, creating the first case of foreign equity in a Chinese restaurant company.

From the first Chinese hot pot stock to privatization and delisting, the glory and decline of Inner Mongolia Little Sheep

In June 2008, Little Sheep was listed in Hong Kong, becoming the first Chinese branded catering company listed in Hong Kong and known as the first Chinese hot pot stock. However, the rapid development of Little Sheep still exposed its own shortcomings, namely, a single hot pot base is difficult to meet the taste of the crowd, long-term consumer boredom, Little Sheep stores around the world is no longer hot. It is also this short board, so the Little Sheep gradually lost its way and began to go downhill.

In June 2009, 3i, a British private equity fund, sold its stake in Little Sheep to China's Yum!

In 2011, Little Sheep and Yum! released a joint announcement in which Yum! acquired Little Sheep for HK$4.6 billion and Little Sheep was privatized and delisted. In November of the same year, the Ministry of Commerce approved the application of Yum! So far, Little Sheep was incorporated by Yum and became the same brother of KFC and Pizza Hut.

However, as Yum! is not familiar with the hot pot business, after the team was replaced again, the taste of dishes and service level of Little Sheep was not suitable for consumers, and the franchisees were cleaned up extensively under the slogan of standardized operation. Eventually, many franchisees who did not meet the requirements disappeared one by one until finally the stores plummeted and performance declined.

From the first Chinese hot pot stock to privatization and delisting, the glory and decline of Inner Mongolia Little Sheep

Time rewinds again to 2002, that year, Zhang Yong of Seabed Rao is full of confidence to lead Seabed Rao out of Chengdu, that year, Zhang Gang with his Little Sheep all the way south to kill Zhang Yong's home base. Under the strong attack of Little Sheep, the status quo of Haidilao at that time was to survive in the cracks.

Nowadays, when it comes to hot pot brands, the first thing that comes to mind for many people is Haidilao, the "highlight" of Little Sheep has long since disappeared. But more than a decade ago, the seabed in front of the Little Sheep, at best, is a little brother without fame!

From its heyday to its decline, Little Sheep only took more than a decade. Maybe it was a strategic mistake, maybe it was the entry of foreign capital, in short, the painful lesson of Little Sheep has not only given enough warning to the industry, but also made their own turnaround is far away.

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