Founder Of HDB-Themed Cafe Lou Shang Blames Himself For Impending Closure, Says Losses Total $400K

Founder says constant changes hurt the business

Located above sibling restaurant Mama Diam (which remains open for biz), Lou Shang opened in August 2023 as a playful tribute to Singapore's HDB heartland culture.

Before entering the F&B industry, Sebastian spent eight years working in Singapore's nightlife scene, rising from server to manager before launching Mama Diam in 2021 with his shareholders, who invested about S$300,000 into the concept.

The cafe-bar's nostalgic setting, complete with old-school touches inspired by older public housing estates, was designed to evoke memories of growing up in Singapore.

But while customers often praised the atmosphere, Sebastian says the business struggled to establish a clear identity.

"When we opened Lou Shang, we wanted it to be a pasta bar," he recalls.

Customers confused by pivots

The original menu featured local-inspired pasta dishes such as rendang pasta and chicken curry pasta. When that failed to gain traction, the team switched to a sharing-plate concept geared towards families.

That didn't work either.

The restaurant then experimented with rotating menus that Sebastian likened to an omakase experience.
Again, the response fell short of expectations.

Looking back, Sebastian believes the repeated pivots confused both customers and employees.

"I wasn't very fixated on what the brand was, so we kept changing," he tells 8days.sg.

Talented staff left ’cos they couldn't keep up with changes

The constant reinvention also affected staff morale.

According to Sebastian, Lou Shang started with a strong team of chefs, baristas and bartenders.

However, many eventually left. "When you keep changing [the menu], the staff get annoyed," he says.

"We had really talented staff when we first opened, but they all left. They couldn't keep up with the changes." Sebastian says departing employees were candid during their exit interviews.

"'Why do you have to keep changing [concepts]?' was something they told me."

Eatery Inspired by his childhood in Hougang

Sebastian says the concept behind Lou Shang was deeply personal.

The entrepreneur spent his childhood in Hougang, where he regularly visited neighbourhood provision shops after school before heading home to his family's HDB flat.

"I used to hang around mama shops every day after school and I stayed on the second floor, so after hanging out downstairs, I would go upstairs and go home."

The layout of 38 Prinsep Street mirrored those memories. Downstairs became Mama Diam, a speakeasy hidden behind a traditional provision shop facade. Upstairs became Lou Shang, which translates to "upstairs" in Mandarin.

Sebastian recalls fondly how neighbours in his estate would share food with one another. He hoped Lou Shang would recreate that same sense of togetherness.

"We wanted Lou Shang to be a space where people come together and it was supposed to be fun," he says with a laugh. "But it didn't turn out fun," he adds ruefully.

Lou Shang lost about $400K so far

From day one, Sebastian says around $200,000 was invested into Lou Shang, covering renovation works, furniture and rental deposits.

"For the first three months, it did very well. Too well, actually. We couldn't cope with the overwhelming support," he says.

However, sales began tapering off after the initial buzz faded.

According to Sebastian, Lou Shang's performance started declining towards the end of its first year and never fully recovered.

He estimates that between the initial investment and operating losses over nearly three years, Lou Shang ended up costing roughly $400,000.

Despite the outcome, he insists he has no regrets about opening the concept.

"I would still open Lou Shang again if I could go back in time, but I would do things very differently," he says.

Focused too much on aesthetics

If given another chance, Sebastian says he would prioritise comfort and food quality over visual appeal.

He believes he became too focused on recreating a nostalgic environment and underestimated what cafe-goers actually wanted.
"I focused too much on wanting the place to look old and look heritage," he says.

"But I forgot that when people go to a cafe, they're looking for good food, a comfortable ambience and great coffee."

Lou Shang's relatively small footprint also proved challenging. While successful cafes often seat 50 diners or more, Lou Shang could accommodate only around 30.

"The chairs weren't comfortable either," he admits.

"Customers taking photos is a plus, but taking photos doesn't make you come back [for the food]."

Laughing, he adds: "It's like going to see the Merlion. You’ll go one time. You won't go back again, right?"

Sister eatery Mama Diam to extend operating hours

The closure does not spell the end for Sebastian's presence at Prinsep Street.

According to Sebastian, Mama Diam will remain open. While Lou Shang's struggles did not directly affect Mama Diam financially as the businesses operate under separate accounts, Sebastian says there were operational consequences.

As Lou Shang's manpower shrank, staff from Mama Diam were frequently called upon to help upstairs. This created additional pressure on the team and occasionally affected service standards at Mama Diam.

Looking ahead, Sebastian says Mama Diam will continue its practice of refreshing its menu periodically and is also considering extending its operating hours.

"We realise a lot of bars now operate until 3am, so we're thinking about extending our hours too," he says.

As for Lou Shang, Sebastian says he is not renewing the lease. While some customers have urged him to stay, he feels another three-year commitment no longer makes financial sense.

Still, he has not ruled out revisiting the concept one day.

"If I were to do it again, I'd probably open it somewhere else, make it bigger, have a dedicated team and make sure the business is sustainable," he says.

Closure announcement drew emotional response

Since announcing the closure, Sebastian says many customers have come by for one final visit.

For Sebastian, those encounters have been bittersweet.

"I realised Singaporeans are actually very humane," he says. "A lot of people complain online, but when they come down and really see the space, it's different."

He recalls speaking to several families who said they wanted to show their children a slice of old Singapore and share memories of their own childhoods.

Sebastian says seeing those interactions unfold was especially meaningful as it was exactly the kind of storytelling he had hoped Lou Shang would evoke from the start.

Lou Shang is located at 38 Prinsep St, #02-02, S88665. Open daily 11.30am to 9.30pm till July 13. More info via Instagram.

Photos: Instagram/loushang.prinsep, Instagram/mamadiam.prinsep