Core Viewpoint - The once-popular bakery brand 85°C is experiencing a wave of store closures, indicating a significant decline in brand popularity and market presence [2][5][9]. Group 1: Store Closures - Multiple 85°C stores have closed recently, including four in Hangzhou and others in cities like Shanghai, Jiangsu, Tianjin, and Guangdong, highlighting a broader trend of declining business [2][3][4]. - The company plans to close at least 40 unprofitable stores, but the actual number may exceed this estimate based on current closure rates [4][5]. - In 2023, 85°C faced significant losses, with approximately 200 million New Taiwan Dollars (around 46 million RMB) lost in the first half of the year, and projections suggest losses could exceed 400 million New Taiwan Dollars (over 93 million RMB) by 2025 if operational adjustments are not made [5][9]. Group 2: Brand History and Market Position - Founded in 2004 in Taiwan, 85°C initially thrived by offering affordable gourmet coffee and baked goods, quickly gaining market share and becoming a popular brand in mainland China after its 2007 entry [8][10]. - At its peak in 2018, 85°C had over 475 stores in mainland China, but has since struggled to maintain its market position amid increasing competition from local brands and new entrants [8][10][11]. - The brand's decline is attributed to the rise of competitors like Naixue's Tea and other local bakery brands that have captured consumer interest and market share [10][11]. Group 3: Industry Trends - The bakery industry in China is experiencing a dichotomy, with some established brands like 85°C and BreadTalk facing difficulties, while others like Haolilai and Bao Shifu are thriving [12][13]. - The overall market for baked goods is projected to grow, with estimates suggesting it could reach 859.56 billion RMB by 2029, indicating potential opportunities for brands that can adapt and innovate [14]. Group 4: Strategic Recommendations - 85°C should accelerate the closure of underperforming stores to reduce costs and improve efficiency [15]. - The company needs to focus on valuable markets, particularly in Eastern and Southern China, and consider exiting less profitable regions [16]. - Emphasis on product innovation and the introduction of new popular items is crucial for regaining consumer interest and market relevance [17][18].