Core Viewpoint - The article discusses the challenges faced by Xibei, a Chinese restaurant chain, as it prepares for an IPO in 2026, highlighting its recent struggles, including the closure of over 100 stores and a significant financial loss attributed to both market conditions and public relations issues [5][10][32]. Group 1: Company Background and Financial Performance - Xibei, founded by Jia Guolong, has grown from a small eatery in Inner Mongolia to over 370 stores across 62 cities, achieving annual sales exceeding 60 billion yuan in 2023 with a net profit margin around 5% [10][11]. - The company has attempted multiple side ventures in the fast-food sector, all of which have failed, leading Jia to refocus on the core brand [10][11]. - In 2024, Xibei experienced a significant decline in business, prompting a reevaluation of its expansion strategy and store layout [11][12]. Group 2: Strategic Decisions and Market Position - Jia Guolong announced plans for an IPO in 2026, aiming for a market valuation exceeding 100 billion yuan, which necessitated rapid expansion and increased store numbers [11][12]. - The brand underwent a rebranding from "Xibei Youmian Village" to "Xibei" to simplify its image and improve operational efficiency [12]. - Xibei invested 3 million yuan in 2023 to upgrade its production line, resulting in improved efficiency and reduced costs [13][14]. Group 3: Challenges and Market Dynamics - The article highlights a critical misalignment in Xibei's business model, where it struggles to balance high operational costs with consumer expectations for quality and pricing [26][29]. - Xibei's pricing strategy, which positions it in the mid-range market (70-100 yuan per meal), has led to difficulties in maintaining profitability while competing with both low-cost and high-end dining options [24][25][29]. - The company faced a public relations crisis following a negative review from a prominent figure, which exacerbated existing issues related to its business model and market positioning [21][32]. Group 4: Future Outlook - The article suggests that even without the public relations incident, Xibei's challenges stem from deeper issues within its business strategy and market adaptation [23][32]. - The current market environment, characterized by oversupply and changing consumer behavior, poses significant risks for Xibei's future growth and sustainability [31][32].