Behind the closure of celebrity chef Steve Lee's restaurant

October 29, 2019 10:50
Steve Lee Ka-ding rode on his popularity to open a chain of restaurants. Photo: Facebook

Celebrity chef Steve Lee Ka-ding rose to fame after his cooking show Granpa’s Kitchen became a big hit on television three years ago.

Riding on his popularity, Lee opened his first restaurant, Ding’s Kitchen, in Causeway Bay two years ago, and then Ding’s Club in Central last year. He was planning to open more eateries and eventually launch an initial public offering.

Sadly, Ding’s Club said in a Facebook post that it will close down next month. The high-end restaurant is but another casualty of the civil unrest that has hit the sector hard.

Lee’s first venture, Ding’s Kitchen, opened in Causeway Bay in September 2017. The restaurant only provides private dinner with limited seats.

Lee is there every night. Customers can see him cook and Lee would also come out of the kitchen from time to time to chat with customers and pose for selfies with them. That contributed a lot to the venture’s instant success.

Encouraged by the strong customer response, Lee aimed higher and opened Ding’s Club the following year with a partner.

This time the investment was much bigger: HK$15 million. The restaurant, with a floor area of 4,400 square feet, had to pay a monthly rent of over HK$500,000.

Lee later revealed that Ding's Club needed a daily revenue of HK$100,000 just to break even.

Lee went on to open D&K Roasted Goose and Deluxe Soup Restaurant together with Ki's Roasted Goose Restaurant, a famous roasted goose restaurant in Hong Kong. The new restaurant in Tsim Sha Tsui mainly targets the mass market.

Overall, the business was having a smooth ride – until an extradition bill sparked a series of oftentimes violent protests that have gone on for months.

“Many customers canceled their bookings," Lee said, adding that losing one day of business will take three days to recover the costs. Luckily, the other two restaurants are still operating well.

Though the protests are the key factor behind the closure of Ding’s Club, the case also shows the intense competition among high-end restaurants, particularly in the Central business district.

Relying on fame to draw customers can also be a risky business model, especially when there are multiple outlets because there is limited time a celebrity can spend in each shop. Quality control could also be a big issue.

Look at the struggles and eventual bankruptcy of Jamie Oliver’s restaurants. Sooner or later, one realizes that it takes a much more complex set of skills – not just fame and cooking talent to build a successful restaurant chain.

This article appeared in the Hong Kong Economic Journal on Oct 28

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist