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Store Development Strategy to Meet Changing Market Demands

Growth Roadmap (First Phase to Third Phase)


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Medium to Long-term Growth Story

Full-scale Resumption of New Store Openings and Restructuring of Store Portfolio to Maximize Area Earnings

Executive Officer
Managing Director of Store Development Division
Ikuo Umeki

Since the market environment has changed significantly since the COVID-19 pandemic, we had to make decisions to close some stores that were performing poorly. On the other hand, we succeeded in maximizing the market potential of our location area through the strategic brand conversion of underperforming stores.
At this point in time, when we are on track to return to profitability by reforming the profit structure of existing stores, we will also resume new store openings at full scale and we plan to open 50 new stores in 2023 in carefully selected prime locations.
With more than 20 brands in our portfolio, we have had the capability to open new stores or conduct brand conversions in different markets, such as suburban, station front, and shopping centers throughout Japan. In 2023, we launched two new business formats that respond to new lifestyles, and both brands are contributing to maximizing revenue in the area as a brand that opens new stores and converts to business formats.

Results

Full-scale Resumption of New Store Openings

The COVID-19 pandemic has led to an increase in the number of properties being vacated in front of train stations, from both our competitors and non-competitors, creating room for new store openings in prime locations. Based on data analysis, we will determine the potential store openings nationwide and continue to pursue a store development strategy that leverages our diverse store portfolio.
At the end of January 2023, three Group brands (Gusto, Bamiyan, and Syabu-Yo) opened simultaneously on the same floor of a building located at the East Exit of Chiba Station. The opening of the new stores takes advantage of the strengths of the Skylark Group, which has a variety of brands, and thanks to the arrival of customers with different reasons for using the store, sales at all three stores exceeded plan. In addition, we opened the Jonathan’s Akihabara Station-front store in early February and the Gusto Shinjuku West Gate L-Tower store in mid-February.


Gusto Shinjuku West West Gate L-Tower store The Number of Foreign Tourists Visiting Our Stores Has Also Greatly Contributed to Business

Brand Conversions to Maximize AreaEarnings

In 2022, we completed brand conversions of 17 stores across the Group, achieving a 159.5% increase in sales. A distinctive characteristic of our brand conversion strategy is the area-based optimal placement model, where we consider not just one particular store location, but the area as a whole by thoroughly reviewing the positions of all Group restaurants in a given area. By eliminating competition among our own brands, we maximize the market potential of an area as a whole. In 2023, in response to the post-COVID-19 era, we plan to expand the number of stores, including new development categories, and perform brand conversions at 40 to 50 stores.

Brand Name Number of Stores Converted Sales Improvement
Bamiyan 10 locations Daily Sales 135.4%
Syabu-Yo 2 locations Daily Sales 175.5%
La Ohana 3 locations Daily Sales 204.4%

Effects of Store Remodeling

The remodeling of 165 stores in FY2022 resulted in a 4.7% increase in sales. Aiming to maximize the effect of remodeling, we plan to remodel approximately 100 stores in FY2023 by improving store signage and layout to suit various locations and store types.

Horizontal Deployment of Know-How

There are about 40 staff members in the Store Development Division who go to store locations, share the knowledge gained at stores nationwide, and create manuals. The horizontal deployment of know-how and discussions for improvement lead to an elaborate store development strategies with improved analysis accuracy.

New Brands That Respond to the Post- COVID-19 Era (Conversion effect: approx. 3.5x)

Hachiro Soba, a restaurant brand that provides everyday meals, opened on January 18, 2023

The main foods available at Hachiro Soba are homemade soba, rice bowls, and set meals. We developed Hachiro Soba as a brand that provides everyday meals under the concept of “enjoying delicious meals to the full.” We opened our first Hachiro Soba store in Shiraoka City, Saitama Prefecture, which is located along a busy national highway. With high visibility of big signage, we recorded sales much greater than our plan even on the first day. Since the conversion effect from the previous brand will be approximately 3.5x, we plan to open about 10 stores along roads and in front of train stations by the end of this year.

The first Yumcha Terrace Tohsai store opened on February 1, 2023

We developed a brand specializing in dim sum as a business that proposes a food culture and lifestyle in which customers can eat dim sum while enjoying Chinese tea. By offering product compositions responding to various usage motivations, such as all-you-can-eat menus, set menus, and a la carte items, the store attracts a diverse range of customers, including female groups, families, and senior couples. Among Skylark Group stores, this store records top-class sales. In 2023, we plan to open 10 stores, mainly along roads, in front of stations, and within commercial facilities.

Maintenance and Management of Store Assets in Cooperation with Skylark D&M Co., Ltd.

To ensure safe and secure store environments for customers and employees, we collaborate with our Group company, Skylark D&M Co., Ltd., to perform safety inspections of our restaurants nationwide, conduct repairs in the event of natural disasters, and perform regular maintenance of the interior and exterior of our stores. In FY2022, we launched the Toilet Cleaning Project for all stores and are working to improve store environments from the customer’s point of view, such as addressing deterioration of facilities due to aging and preservation of aethetics.

Conversations with About 3,000 Property Owners

Building trusting relationships with property owners, who are joint managers, is essential for stable store operations for the long term. In addition to emphasizing communication with property owners by location management personnel, we also send quarterly letters to property owners regarding our policies and initiatives to deepen their understanding of our growth strategy.