85°C café to scale back China operations, expand in U.S.

Taipei, Oct. 11 (CNA) Gourmet Master Co., the owner of the 85°C Bakery Cafe chain, has decided to close poorly performing outlets in China under a business restructuring plan, while the company will continue to expand operations in the United States.

85°C café said as the Chinese market faces headwinds in terms of weak demand, a board meeting on Thursday decided to close stores with lower-than-expected profitability to optimize the chain's operations and logistics.

While the company did not disclose how many stores will be closed in China, local media reported 85°C café is expected to close about 40 outlets or 10 percent of the total.

According to the reports, 85°C café had 441 stores in China as of the end of June, including 134 in Jiangsu province, the largest number in a single area in China, with 119 in Shanghai and 109 in Fujian province.

In the first nine months of this year, 85°C café's China operations suffered a 14 percent year-on-year decline in revenue in Chinese yuan terms, the café chain said, adding China accounts for 37 percent of its total sales worth NT$13.77 billion (US$451 million), down 2.06 percent from a year earlier.

85°C café added that its operations in China booked large operating losses in 2024 and the first half of 2025. Citing a market estimate, 85°C café said after the business restructuring, its operations in China could break even and report a profit.

The business restructuring aims to improve shareholders' equity and boost the company's value over the long term, the company said.

On the other hand, 85°C café noted that it will seek to extend its reach in the U.S. after adding three new outlets in the third quarter of this year.

As of the end of September, the café chain owns 86 outlets in the U.S. and expects the number to increase to 90 by the end of this year.

During the January-September period, 85°C café said its stores in the U.S. reported a double-digit sales increase with the number of patrons on the rise.

Since the beginning of this year, 85°C café has entered five new markets in the U.S. -- New York, New Jersey, Illinois, Kansas and Louisiana -- the café chain said. As a result, the U.S. has become the largest sales contributor to the company, accounting for 48 percent of total revenue in the first nine months of 2025.

As its operations in the U.S. market continue to expand, 85°C café said the revenue ratio is expected to increase next year.

In the first half of this year, 85°C café posted NT$1.83 in earnings per share, up from NT$1.32 over the same period of last year.