Revenue shrank by 2 billion yuan, with 1,600 stores closed in two years! By 2025, Pagoda Fruit still expects a loss of 300 million yuan as the market is "reverse educating" the fruit king | Dayu Finance

Ask AI · Behind Yiguo Garden’s Revenue Plunge: How Does Consumption Shift Reshape the Fruit Retail Landscape?

As Yiguo Garden Group, “China’s No. 1 listed fruit retail chain,” released its 2025 full-year results announcement on March 26.

Against the backdrop of a complex global economic environment and the ongoing transition of China’s consumer mix, this “shrinking” earnings report sketches the painful journey of a retail giant moving from rapid expansion to “survival by downsizing.”

The financial report shows that in 2025, Yiguo Garden achieved operating revenue of RMB 8.17B, down 20.4% year over year. Compared with the 2024 revenue scale of RMB 10.27B, Yiguo Garden lost more than RMB 2 billion in revenue within a single year.

Profit also faced severe pressure. In 2025, the loss attributable to owners of the company was RMB 317 million. Although the loss narrowed by 17.8% compared with the 2024 loss of RMB 386 million, it still did not turn the company’s loss-making situation around.

A Tough Test for Stores: Franchise Core Base Under Pressure, Over 1,600 Stores Shut Down in Two Years

Looking back at Yiguo Garden’s path to going public, 2023 was a high point for the company. In the first half of 2023, Yiguo Garden’s revenue reached RMB 2B, and profit attributable to owners was RMB 261 million, with the total number of stores once nearing 6,000.

However, in just two years, the market environment underwent a dramatic reversal. In 2025, Yiguo Garden’s revenue scale fell sharply, and its core franchising system was also experiencing unprecedented turmoil.

Yiguo Garden’s revenue is highly dependent on franchise stores. In 2025, product sales revenue of its franchise stores was RMB 6.29B, accounting for 72.3%. But this core engine is losing momentum.

The financial report shows that as of December 31, 2025, the total number of Yiguo Garden’s offline stores was 4,468, down by a net 659 stores from 5,127 at the end of 2024.

If the timeline is extended and compared with the 6,093 stores at the end of 2023, Yiguo Garden closed 1,625 stores over the two-year period. This means that the “fruit empire,” once spread across the streets, shrank by more than a quarter of its footprint within two years.

For such a large-scale wave of closures, Yiguo Garden said the company encourages franchisees to relocate from high-rent areas, or closes stores with poor performance and high labor costs, aiming to optimize its network and improve efficiency.

But the data reveals deeper difficulties: In 2025, the total sales revenue of franchise stores fell year over year by about 20%.

This is mainly attributed to the reduction in the number of franchise stores and the decline in average revenue per store. In an environment where consumer willingness is weakening, franchisees’ loss of confidence has become a pain point that Yiguo Garden can hardly avoid.

Capital Self-Rescue: Equity Placements at Low Levels to Raise Funds to Repay Debt, Comprehensive “Cost Cutting” to Get Through the Winter

Against the backdrop of store shrinkage and revenue decline, Yiguo Garden carried out a key capital operation in the autumn of 2025 to ease its shortage of cash.

The financial report shows that the company completed a placement of 279.5 million new H shares on October 9, 2025, receiving net proceeds of about HKD 325 million.

This money was urgently needed. The company plans to use the proceeds mainly to pay trade payables arising in daily business, repay bank loans, and supplement general working capital.

On one side, it reaches out to the capital markets for funding; on the other, it conducts a large-scale “cost cutting” internally.

In 2025, the company’s employee benefit expenses (excluding severance compensation) were RMB 528 million, down 20.3% year over year, mainly because digitized and intelligent systems reduced manpower needs.

At the same time, research and development expenses also fell from RMB 136 million in 2024 to RMB 105 million, while the number of R&D personnel decreased from 336 to 262.

This full-spectrum contraction—from labor to R&D—deeply reflects the company’s attempt to maintain basic financial safety by shrinking the scale of operations and tightening its belt.

Strategic Shift: “Repaying” Through Price Cuts on the 2C Side, Searching for a Second Growth Curve on the 2B Side

Previously, remarks by Yiguo Garden Chairman Yu Huiyong about “educating consumers to mature” and “not catering to consumers” sparked significant controversy. But the market reality of 2025 delivered a heavy lesson to this arrogant posture. When consumers become rational and price-sensitive, the so-called “education” proves ineffective.

In the latest financial report, Yiguo Garden’s wording has changed noticeably. The company set “a high-quality and high value-for-money fruit expert and leader” as its core strategy.

This shift is reflected in large-scale promotions and concessions. In 2025, Yiguo Garden carried out 22 “Good Fruit Repays Kindness” campaigns, rolling out high value-for-money products such as pummelos and lychees. The cumulative order volume reached 25 million, and sales exceeded RMB 500 million.

The financial report states that to cope with soft consumption, between the second half of 2024 and September 2025, the company continuously optimized its product mix with lower gross margins to meet consumers’ demand for value for money.

While this value-matching price reduction can recapture some foot traffic, it also erodes gross margin space. In 2025, Yiguo Garden’s gross profit was RMB 597 million, down 21.9% year over year.

Meanwhile, Yiguo Garden’s membership system—something it prides itself on—also faces challenges.

Although the cumulative number of members reached 95.30 million at the end of 2025, up 5.0% year over year, affected by the macro environment, customers became more cautious in deciding whether to purchase paid memberships. The company had to shift its focus toward deeply cultivating existing member groups.

When the C-end business faces pressure, Yiguo Garden is increasing its tilt toward the 2B business, trying to find a way out in the supply chain behind the scenes.

The financial report discloses that in 2025, the group’s revenue from direct-sale fruits and other food was about RMB 5.91B.

In addition, the B2B procurement platform “Shenzhen Bangguo” recorded a total transaction value of RMB 2.38 billion in 2025. By setting up city warehouses across the country, it further expands penetration into small and mid-sized fruit suppliers.

In its outlook, Yiguo Garden clearly mentions that it will provide customized supply chain solutions for partners and build a second growth curve for its business.

In 2026, management described it as “a key year for moving toward high-quality development,” and plans to push for large-scale expansion of its retail business.

But given the situation of sharply reduced revenue and damage suffered by franchisees, Yiguo Garden obviously cannot restore its former glory by relying on “digitized and intelligent systems” alone.

In a fruit industry segment that is extremely fragmented in competition, if it cannot find a true balance between quality and price, the market’s “education” of Yiguo Garden may continue.

Reporter: Du Lin Editor: Cao Mengjia Proofreader: Tang Qi