New Store Growth (Domestic)

New Store Growth (Domestic)

A challenge for the evolved Skylark: Growing new stores in a new era
Around 300 new store openings in Japan in 3 years

With over 20 diverse brands in our portfolio, Skylark Group has wielded the ability to open new stores and conduct brand conversions matched to different markets, including suburban, station-front, and shopping center areas throughout Japan. In 2023, we launched two new brands matched to new lifestyles. Both of these are contributing to the maximization of area revenues as brands for new store openings and brand conversions.
Over the past few years, our store openings in large commercial facilities and in urban station-front areas have attracted more customers than we had planned, contributing greatly to sales and profit.
Under our store opening policy, from FY2025, we will accelerate openings in commercial districts, private railway station-front areas in metropolitan areas, and station-front areas in regional cities, and will increase brand variations in regional medium-sized cities. We plan for about 300 new store openings domestically over the next three years.

Reasons behind opening new stores

Our stores opened in recent years contribute greatly to our revenue. The stores that we opened between 2015 and 2019, prior to the COVID-19 pandemic, account for 9.7% of our Group’s stores but 13.4% of operating profit.
Stores opened since 2015 accounted for 80% of the 30 stores with the highest sales in March 2024. This shows that new store openings closely tailored to the needs of the times have taken on a more important role in our corporate growth.

Contribution to performance through new store openings

Top 30 stores by sales in March 2024, by fiscal year of opening

Year of opening	Number of stores
2023	5
2021	1
2020	3
2019	4
2018	2
2017	2
2016	1
2015	6
2014 and earlier	6
Total	30

※Stores operated by Skylark Restaurants Co., Ltd.

Competitive edge of Skylark Group which enables us to successfully open new stores

1. From among over 20 brands, we can select those that best fit the market.
2. Our nationwide daily delivery logistics network and central kitchens facilitate store openings in non-urban areas.
3. Our customer base, collected from 3,000 store locations, allows us to open stores in precise locations based on extensive customer data.
4. We have 100,000 employees who are well versed in table restaurant service.
5. We are able to operate under a one-manager structure based on a unified personnel system.

Leveraging our advantage in being able to select the most optimal brand, we analyze the potential for store openings.

Fine-toothed market analysis is essential in opening stores. We ensure the success of store openings through databased selection of optimal brands. As the market environment and consumer lifestyles undergo great change, our ability to choose the brand that most assures profit for each site is a major point of differentiation from our competitors. Based on market data on the surrounding area and big data collected from our approximately 3,000 stores nationwide, we research the assumed customer demographics and connect this to the selection and development of optimal brands.
Based on these analyses, we estimate that there is potential for opening over a thousand more stores. We are considering store openings with a priority on highly accurate site selection.
Moreover, through detailed analysis of how many customers use our stores, their motivations, guest count by time of day,and other customer trends, we determine number of seats and tables, their layout, interior lines of movement, interior design, and other detailed aspects of store design, which we connect to the creation of stores with high customer satisfaction.

From market analysis to store opening

Potential for new store openings

Store opening area	Assumed brands	l for store openings	Notes
Concentrated commercial areas		100+	109 stores if one store from each brand at left is placed at points with no stores in the target 35 areas. Depending on market size, additional openings are possible even in areas with existing stores.
Metropolitan private railway station-front areas		400+	There are 622 candidate stations with a population of over 10,000 within 500 meters. Of these, 465 stations have no Gusto nearby. Adding in other brands, we estimate potential for over 400 stores.
Multiple brand store openings in regional cities		400+	125 municipalities with population of 100,000 or more, excluding Tokyo, Nagoya, and Osaka Of these, municipalities for which we can consider opening 3 or more additional stores: 69 locations/342 stores Municipalities for which we can consider opening 1 or more stores: 56 locations/96 stores
Shopping centers		100+	In Japan, there are 174 shopping centers that have annual sales of 20 billion yen or more. Considerable potential exists, with many brands not yet opened in most shopping centers.
Other		TBD	Store openings in resort locations and redeveloped properties (ground floor of condominiums) are possible.

Opening multiple brands in one area for regional cities

As an example, the Gusto and Bamiyan stores we operate in the city of Obihiro in Hokkaido yield high sales. Taking advantage of our strengths in the operation of multiple brands and our internal logistics network, we plan to implement more multiple brand store openings in the same area.

Opening more small-sized station-front stores

In recent years, superior properties with small footprints are increasing in station-front areas. As small (floor space less than 230 square meters and fewer than 80 seats), station-front Gusto stores are profitable and present low complexity in operation, we will actively try to open stores in such locations.

Creating an organization that enables sustainable store openings by enlarging the store development team

We have increased our store development staff by 20 persons to build a structure aimed at 300 store openings over the course of 3 years from 2025. We also engage in external hiring of alumni (persons who had changed jobs from Skylark, who are already familiar with our business) and experienced persons, as well as in outsourcing of rent negotiations and property introductions, to prepare a robust organization for our various store development initiatives.

Strengthening education and training for store development members
（Securing high-quality properties）

1. Create manuals for site development, education/training, behavior management
2. Quantification and visualization of property evaluations for initial property judgments
3. Elaboration and clarification of the new store development workflow
4. Speedy action on special properties to avoid missing out on superior properties

Preparations for expansion of store openings
（Preparations in terms of human capital, manufactured capital, and financial capital）

1. Planned increase in hiring, including new graduate hires, mid-career hires, and internal change of roles
2. Active hiring of non-Japanese employees
3. Proposal of new working styles to match diverse lifestyles, and changing our personnel system
4. Preparation for expansion of primary processing production capacity at our central kitchens