(Yicai Global) June 29 — Luckin Coffee’s Beijing stores are still operating normally thus far, but the firm has slowed its aggressive expansion since the year’s start, with a precipitous decline in new openings from last year as its shares [NASDAQ:LK] are set to halt trading at today’s opening and delist when the time for its appeals lapses.
Roughly 1,800 companies under variants of the ‘Luckin Coffee’ name registered in China in 2018, with that figure topping 2,000 last year, but with only 186 such firms forming this year, an 80.6 percent annual drop from same period last year, Beijing Business Today reported today, citing data from the Tianyancha corporate registry information website.
Thus far this year, 99 such firms have had their business licenses revoked or are in the course of cancellation. These data prompt inferences about the number of its stores in China and changes in their number and thus shifts in Luckin’s pace of growth. The firm opened nearly 4,000 stores in the country in 2018 and last year in a time of explosive development. The tempo of store openings has slowed to a trickle since this year’s start as the firm has started to close some outlets in the wake of a CNY2.2 billion (USD310 million) accounting scandal that has rocked the Starbucks wannabe.
The company’s stock tumbled 54 percent to close at USD1.38 on June 26 after circuit breakers stopped its trading six times, giving the company an about USD347 million market cap.
The firm notified Nasdaq on June 24 of its decision to withdraw its petition for a hearing and not appeal its removal, the coffee chain said in a June 26 filing with the US Securities and Exchange Commission. The company’s shares will thus be suspended at the opening of business today in prelude to the delisting finale.
Editor: Ben Armour