Helen's trademark ruled invalid, market cap plummets. Where is the young-generation dilemma?

Have you been to Helen's? This Chinese pub, known as "the first pub for young people," recently lost its Chinese name as the court finally ruled the three Chinese trademarks "Hailunsi," "Hailunsi Pub," and "Hailunsi Yue Da Pai Dang" invalid.

However, more than losing the Chinese name, Helen's bigger crisis may be that the young people it once represented are gradually turning to other consumption choices.

Helen's trademark battle: final judgment invalid

Helen's was founded in 2009, first opening in Wudaokou, Beijing. Founder Xu Bingzhong said that in the early days, the business mainly targeted foreigners, such as overseas students. The English trademark "Helen's" was used initially, and a batch of related English trademarks were applied for in 2013, but the core Chinese trademarks were not registered until 2018, laying a hidden problem for subsequent trademark disputes.

According to Interface News, the trademark dispute mainly arose between Chengdu Helen Binbin Hotel Co., Ltd. and Helen's. The other party successfully registered two "Helen" trademarks in 2016, in Class 43 for restaurant and bar services. Then on May 23, 2023, and August 7, 2024, they filed invalidation requests against the "Hailunsi" trademark and "Hailunsi Pub" and "Hailunsi Yue Da Pai Dang" trademarks with the National Intellectual Property Administration, claiming that the disputed trademarks were similar to the cited trademarks in similar services, likely causing public confusion about the source of services.

After three years of back-and-forth, on the evening of June 25, Helen's announced that the court had finally ruled its three Chinese trademarks invalid. The announcement stated that, based on current assessment, the dispute has no significant impact on the group's overall business, daily operations, or financial position, and the group can continue to use undisputed trademarks in daily business.

A Blue Whale News reporter found that as of now, Helen's offline stores and online communications still use its Chinese name "Hailunsi" and related expressions. The impact has not directly affected specific stores, but the capital market is more sensitive.

After the news, stock prices fell at the open on June 26, at one point dropping over 6%. By the close, Helen's stock price fell to 1.58 Hong Kong dollars. Helen's market cap once reached 30 billion Hong Kong dollars in the year of listing, but now it is only 2 billion Hong Kong dollars, a shrinkage of over 90%.

"First pub for young people" gets older: expansion, losses, and transformation

Helen's earliest stores were located near university campuses, with the main consumer group being foreigners and overseas students. Later, founder Xu Bingzhong changed the strategy, positioning Helen's as "a space for young people to freely socialize offline," emphasizing "extreme cost-effectiveness." All bottled beers at Helen's are priced under 10 yuan, cocktails slightly more expensive at around 20 yuan.

The model of "young people + cost-effectiveness" was quickly replicated. By the end of 2021, Helen's had 782 stores and was listed on the Hong Kong Stock Exchange with the halo of "the largest chain pub in China."

According to Helen's prospectus submitted in 2021, revenue from 2018 to 2020 was 115 million yuan, 565 million yuan, and 818 million yuan, respectively; net profit was 9.734 million yuan, 79.136 million yuan, and 70.072 million yuan, respectively. Own-brand alcoholic drinks with a gross margin over 70% contributed more than 60% of Helen's alcohol revenue; through factory direct procurement and economies of scale, it also obtained relatively favorable wholesale prices for third-party brand drinks.

But as scale expanded, store opening costs soared. Combined with the impact of the pandemic and other factors, Helen's net loss in 2021 reached 230 million yuan, and the next year the net loss expanded to 1.601 billion yuan. After cumulative losses exceeding 1.8 billion yuan, Helen's began closing stores to save itself: by the end of 2023, Helen's had 479 pubs, 288 fewer than a year earlier, more than 40% less than the peak of over 850.

At the same time, Helen's initiated a strategic transformation, shifting from a full direct-store model to open franchising, the "Hi-Pi Partner" plan. When the plan was launched, the minimum capital threshold was 600,000 yuan; by 2024, the investment threshold for new store types dropped to about 400,000 yuan.

Under competition from bistro everywhere: turning loss to profit but same-store pressure remains

The transformation measures brought phased results. According to the 2025 financial report, Helen's full-year revenue was 540 million yuan, down 28.3% year-on-year; net profit attributable to parent was 33.954 million yuan, turning from loss to profit. The proportion of own-brand beverage revenue and gross margin increased year-on-year, with store-level contribution gross margin rising to 73.77%, indicating improved overall operating conditions over the previous year.

But same-store performance still faced decline: in 2025, the average daily sales per same-store of Helen's direct and franchise partner stores was 8,500 yuan, down over 18% year-on-year; the overall average daily sales of individual partner stores was only 4,100 yuan, with all store types experiencing declines in daily sales. In the restaurant industry, where average daily revenue per store often exceeds 10,000 yuan, the revenue of franchise stores appears relatively low. Additionally, nearly 70% of Helen's stores are located in third-tier cities and below, putting pressure on profitability.

Meanwhile, young people have more places to drink, and the appeal of low prices is weakening. Data from Zhaomen Canyan shows that over the past year, 38,000 new pubs have opened, with consumption scenarios diversifying from Homebar, craft beer pubs, livehouse pubs to various bistro styles.

Among them, bistros operating "food + drink" have risen strongly. The bistro brand "Huan Shi," run by its parent company Jimosiwei, has developed rapidly and submitted its prospectus to the Hong Kong Stock Exchange in January this year. Huan Shi has over 100 stores in China, with company revenue exceeding 1 billion yuan in 2024.

Unlike Helen's, which opened the market with low prices and scale, Huan Shi follows a different path: emphasizing atmosphere, higher pricing, and per capita consumption over 100 yuan. According to the prospectus, in the first nine months of 2025, average daily sales per store were 29,880 yuan. By offering brunch, afternoon tea, dinner, and night drinks, it extends operating hours to over 18 hours to improve store utilization and operational efficiency. During the same period, beverages and drinks contributed about 45% of revenue, 85% of which were alcoholic beverages; overall gross margin was stable at 68.7%, higher than industry average.

But Huan Shi also faces challenges, including higher store costs squeezing profits, and consumer complaints about food taste and quality may affect brand reputation.

Chinese food industry analyst Zhu Danpeng believes that, like the coffee track, the low, mid, and high-end brands each have their market. The pub industry is currently in a high-speed expansion phase but overall concentration is not high. Perhaps after about 5 years, driven by capital and consumption dividends, the market may see leading brands and a clearer competitive landscape.

Zhu added that product pricing is not the only key factor. Hardcore factors determining the future development of pubs include brand effect, scale effect, fan effect, supply chain completeness, and single-store operation capability. Since stores are in different locations, strategies should also be differentiated. For Helen's, how to operate each store well may be the biggest challenge.