As an ancient Chinese saying goes, ''there's no banquet in this world that never ends.'' Five years after its opening, Maison Boulud, the flagbearer for French restaurants in Beijing, announced it will be closing early next month.
"The restaurant [suffered] a huge loss and cannot operate anymore. Therefore we have no choice but announce to our staff that we will shut down the place on Dec 8, 2013." A notice dated November 22 pinned on a staff billboard at the restaurant read. The notice was from Dongjiangmixiang, the investment firm behind the property which houses the world famous French dining franchise.
The statement also announced that the restaurant had made a jaw-dropping loss of 245 million yuan by the end of 2012 "due to the restaurant having been long in the red". A person familiar with the business says the Boulud project itself has been a success financially however, "I get a P&L every month that says our operation takes in more than it spends". The source pointed out that the number must have included the development expense, cost overruns, delays and acquisition price of the property.
A look at Dongjiangmixiang's investment history seems to confirm our source's allegation. The Beijing based company – named after the hutong once known as Legation Street – was the company which introduced several high-end wine&dine brands including Agua and Fez Bar to the capital. Its owner, a 51 year old mergers and acquisitions lawyer, art connesiour and restaurant, bar and lounge investor, Handel Lee, also owns a Shanghai lifestyle centre Three on the Bund (controversially something of a copycat version of Michelle Garnaut's M on the Bund), said by many to be a major milestone in the 2004 redevelopment of the city’s historic riverfront.
Lee’s focus on presentation and historic preservation over costs has reportedly put him in conflict with his partners in the past. His projects have a habit of being behind schedule and over budget. "Three on the Bund cost $36 million, not counting the property, owned by the Singaporean-Indonesian firm that bankrolled the project. Legation Quarter has cost $40 million so far, not counting the land and lease," Forbes reported.
In an interview with the financial magazine in 2009, Lee mentioned how the Maison Boulud was suffering from the worldwide recession. “The impact is significant,” he said, “there are fewer businesspeople coming to China and spending is off. Everything is lower than we expected.”
Insiders speculate therefore that Maison was closed because the original investment wasn't recovered as quickly as its backers expected, though this is hardly unheard of in the Chinese food and beverage industry. In the 2009 Forbes piece, it's hinted that the Legation Quarter project has more than one investor and Lee may not be the one who made the decision. Attempts to contact Lee were unsuccessful.
Lost Heaven, a Yunnan-style eatery, will soon be the last restaurant standing in a courtyard which was once home to the US Embassy, but there seems no need to say au revoir to the widely beloved French restaurant yet, as a statement released yesterday said: "The coming months will bring many exciting new projects to our company and we look forward to sharing them with you all very soon."
[Image via Maison Boulud]