The once high-end ice cream brand Zhongxue Gao, which was popular in the market, is now facing a crisis of bankruptcy review. Known for its ice creams with prices generally exceeding 10 yuan and limited editions reaching up to 88 yuan, Zhongxue Gao, dubbed as the “Hermes of the ice cream world,” has encountered a public trust crisis after enduring the “does not melt” controversy, leading to the collapse of its former upscale image.
On July 17th, according to the latest information from Tianyancha, Zhongxue Gao Food (Shanghai) Co., Ltd. has been applied for bankruptcy review by Shanghai Zhenliao Trading Co., Ltd., handled by the Shanghai Third Intermediate People’s Court. This marks the formal entry of this once-star brand, with annual sales exceeding 1 billion yuan, into the abyss of bankruptcy proceedings.
This bankruptcy review is not an isolated incident. Previously, Zhongxue Gao’s wholly-owned subsidiaries Panzhu Youxi (Shanghai) Biotechnology Co., Ltd. and Zhongmao (Shanghai) Food Technology Co., Ltd. have also been applied for bankruptcy review, indicating the serious financial difficulties of Zhongxue Gao’s overall capital chain.
According to the execution situation of the Yangpu District Court in Shanghai, Zhongxue Gao Food (Shanghai) Co., Ltd. is unable to repay its due debts and its assets are insufficient to repay all debts. Therefore, the court has suspended the execution and transferred the case to bankruptcy review. Currently, Zhongxue Gao has a total of 10 executed individuals with a total amount of up to 23.03 million yuan.
Furthermore, the company has as many as 9 frozen equity notices, with frozen equity amounts exceeding 40 million yuan, mainly involving its wholly-owned subsidiaries. The legal representative of the company, Lin Sheng, has also been restricted from high consumption, with 27 consumption restriction orders, and has been involved in 78 judicial cases, with over 90% as a defendant.
Established in 2018, Zhongxue Gao quickly gained popularity with its unique tile-shaped design and upscale positioning. Its products are generally priced at over 10 yuan, with some limited editions costing up to 88 yuan per stick. It once achieved the impressive feat of selling out Ecuadorian powder diamond ice cream priced at 66 yuan per stick within 15 hours during the Double Eleven period and achieved a sales turnover of over 1 billion yuan in 2021.
The outstanding performance attracted the attention of the capital market, and Zhongxue Gao completed four rounds of financing from 2018 to 2021, with the A round financing amounting to 200 million yuan.
However, a turning point occurred in 2022. The “does not melt at room temperature” incident propelled Zhongxue Gao into a vortex of public opinion, leading to widespread doubts about the quality of its products and earning it the title of “ice cream assassin.” Subsequently, the company faced ongoing controversies in 2023, including salary arrears, staff turnover issues, as well as operational difficulties such as supply chain disruptions and product shortages.
Tianyancha information shows that Zhongxue Gao Food (Shanghai) Co., Ltd. has faced multiple legal litigations in recent years, with the number of insured employees decreasing to only 2 individuals, and 6 out of its 14 wholly-owned holding subsidiaries have been deregistered, along with all 21 branch offices.
Facing the brink of bankruptcy, Zhongxue Gao has been striving to “slim down” for self-rescue. The Shanghai office has been vacated, and the number of headquarters employees significantly reduced. The company’s founder, Lin Sheng, has even ventured into livestreaming to sell goods, announcing that they will “sell sweet potatoes to pay off debts.” He mentioned that 729 employees have been owed salaries and pledged to “continue selling Zhongxue Gao through live broadcasts or other means, hoping to gradually restore the company to normal operation and pay off the debts bit by bit.”
Currently, on the Douyin platform, the account “Zhongxue Gao Lao Lin” is still active, and Lin Sheng has responded to hot topics such as “the ice cream assassin finally chilled out” and “Zhongxue Gao sweet potato assassin” in videos. He also reflected on the company’s challenges, acknowledging that they did not respond promptly to malicious edits and failed to properly arrange for employees while the company still had funds available.
From being a “internet celebrity” brand with annual sales exceeding 1 billion yuan to now facing a bankruptcy review application, the downfall of Zhongxue Gao is lamentable. Lin Sheng’s path of livestreaming to pay off debts reflects the company’s arduous efforts and determination for self-rescue. Whether Zhongxue Gao can overcome this crisis remains uncertain.