Personnel reshuffle at the top of the company gives voice to grassroots new guard
China’s largest hot pot restaurant chain Haidilao (06862: HK) (Chinese: 海底捞) by market value on March 1 appointed Yang Lijuan as the company’s new and first female CEO, in a move to bolster leadership in the face of massive store closures and widening losses.
According to a company statement, Yang, 43, until recently the deputy CEO and CFO of the company, will be in charge of management and strategic development.
She would, however, remain in her role as the director of the “woodpecker” campaign, an overarching plan by the hot pot giant to improve stores with undesirable performance.
Zhang Yong, the former CEO and founder of the company, will continue to be the chairman of the board and executive director.
Haidilao also announced the appointment of two executives born in the 1980s. Li Yu, 36, will serve as the chief operating officer overseeing Haidilao’s business in China’s mainland and Wang Jinping, 38, is named the chief operating officer responsible for the Hong Kong, Macau, Taiwan markets and the hot pot firm’s overseas ventures.
“This is another move for the Haidilao management to become younger after we introduced seven young executive directors in August 2021,” the company said, adding that they would assist the new COOs to enhance efficiency in different regional markets and help oversee management and implementation.
This partly aligns with Haidilao’s tradition of promoting its own employees to senior positions or become store managers. Through incentives such as sharing profits with frontline operators, an arrangement often compared to “apprenticeship” in business school case studies, Haidilao has thrived over the past decades and achieved exponential growth.
The three promoted employees were all from the grassroots level. Having worked at Haidilao for over 27 years, Yang Lijuan started as a waitress and became the key figure to expand Haidilao’s market to outside of China’s western Sichuan province, where the brand originated.
Yang sat at the helm of the “woodpecker” drive when the pandemic and rapid store expansion took a toll on the company’s growth. This led to the shutdown of about 300 struggling stores.
Haidilao issued a profit warning to the Hong Kong Stock Exchange on February 21, saying it expected to record a net loss of CNY 3.8 billion to CNY 4.5 billion for the year ending December 31, 2021. The company was also expected to post a full-year revenue of over CNY 40 billion, up more than 40% from CNY 28.6 billion in 2020.
Haidilao’s competitors in the hot pot business include Xiabu Xiabu (00520: HK) (Chinese: 呷哺呷哺), Banu (Chinese: 巴奴), Coucou (Chinese: 凑凑), and Want (Chinese: 捞王).