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Katrina Group rides K-wave to open beer and chicken restaurant

Samantha Chiew
Samantha Chiew • 7 min read
Katrina Group rides K-wave to open beer and chicken restaurant
Katrina’s executive chairman & CEO Alan Goh in ST Signature Jalan Besar. Photo: Albert Chua/ The Edge Singapore
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New Korean restaurant bar Daily Beer, a popular beer and fried chicken joint from South Korea, has landed in Singapore at the heart of the central business district (CBD) area in Telok Ayer.

Sporting a full house almost every night, customers happily chomp on crunchy “Angry Bird” fried chicken and wash it down with a range of craft beers such as K-Festbier and Kampong Pilsner. As a measure of how popular Daily Beer is in its home country, it has over 370 stores across South Korea, and this is its first overseas outlet.

The F&B group responsible for bringing this brand here is Katrina Group 1A0 -

. Daily Beer is just the latest in a series of joint ventures between Katrina and DailyBeer Co. Katrina will also be launching the inaugural Daily Chicken restaurant by the middle of this year with further plans to open at least four more restaurants under this agreement by 2028.

Alan Goh, executive chairman and CEO of Katrina, in an interview with The Edge Singapore, says: “The synergies from this collaboration will add value to our shareholders as we continue to carry out a series of food and beverages rebranding exercises to rejuvenate our F&B brands.”

“While we work towards the grand opening of Daily Chicken by mid-2024, we plan to extend Daily Chicken’s offerings through our delivery services platform. We will also continue to explore further synergies, as well as to enhance service offerings and customer experience,” adds Goh.

Daily Beer aims to target young professionals in the CBD. This is different from Katrina’s existing F&B brands including Bali Thai, Streats, So Pho, Tomo Izakaya, Honguo and Sanchos, which offer fast and casual dining. Before Daily Beer, Goh, who founded the company in 1995, had always focused on organic growth, creating and developing brands that target the mass market. However, the Covid-19 pandemic changed his strategy.

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Goh recalls that the pandemic was a tough period for Katrina. He had to shut down about 14 outlets permanently amid lockdown and social distancing measures, which impacted the company’s top and bottom lines. Katrina’s F&B revenue in FY2020 ended December 2020, the first full year when the virus hit, was $41.8 million, down nearly 40% from $68.9 million in pre-pandemic FY2019.

“During Covid-19, we had the thought to want to reconsolidate. We noticed that trends were also changing very fast — for both shopping and dining behaviours. So, we decided to explore new brands,” says Goh, adding that as Korean pop music, movies, television dramas and miniseries were big hits during that time, the group decided to ride the trend.

Diversifying into hospitality

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Apart from being an F&B operator, Katrina had previously diversified into the co-living hospitality sector, one that has seen rising demand in the Singapore market.

In December 2018, Katrina acquired Straits Organization, which runs affordable and diverse accommodations, for $280,000 in its bid to expand and diversify into the hospitality market.

According to Goh, the acquisition reinforces the company’s strategy of diversifying its revenue stream across businesses, markets and segments to mitigate against weaknesses from any one sector.

He says Straits Organization has not only provided Katrina with a toehold in the hospitality segment but also offered the possibility of cross-sector collaboration for its core F&B business and further regional expansion. “It is an earnings accretive acquisition which we believe bolsters the group’s growth potential and provides a stable base of recurring income,” says Goh.

Goh has chosen the asset-light route for the hospitality business. Instead of acquiring physical properties, Katrina signs management contracts with property owners.

Less than a year after acquiring Straits Organization, Katrina in October 2019 made its foray into the co-living market by launching its first property in Chinatown, Singapore under the brand ST Signature, to be managed by its own hospitality arm ST Hospitality Group.

Since then, Katrina has further expanded its portfolio of co-living properties. Today, it has five properties here, with the latest property opening at 21 Middle Road in October 2023.

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Goh shares that there is a “growing demand for distinctive yet value-for-money accommodation in prime locations”.

“With this addition to our portfolio, guests seeking both short-term and long-term stays, digital nomads, budget-conscious travellers, and groups visiting Singapore for leisure, business or events will have more options,” he adds.

FY2023 reports a loss

In its latest FY2023 ended December 2023, Katrina recorded a loss of $1.35 million, compared to earnings of $3.5 million. Revenue also declined by 8.0% y-o-y to $59.3 million. This was mainly due to the group’s F&B segment, which Goh shares is still loss-making as there has been a decrease in the number of outlets as well as increased competition.

For FY2023, Katrina’s revenue from its F&B segment dropped to $42.1 million from $47.3 million in FY2022. Segment losses widened from $311,000 to about $4.2 million, a financial situation which Goh is trying to reverse. “Our plan for our F&B segment is to be profitable. We will be retaining our brands and bringing in new ones. We will also be introducing new menu items while increasing selling prices (to reflect inflation),” he says.

Currently, including the latest Daily Beer outlet, Katrina runs 27 restaurants in Singapore and one restaurant in Indonesia under six different brands. This is down from 30 in Singapore as at the end of FY2022 and one in Indonesia under seven brands.

On the other hand, the hospitality segment contributes about 30% of the company’s total revenue. Segment revenue held largely steady at $17.3 million for FY2023 versus $17.1 million for FY2022, with new contributions from the start of operations for ST Residences Balestier, a 20-unit property in August 2022; as well as the start of operations for ST Signature Bugis Middle in late October 2023. Segment profit dipped from $3.8 million in FY2022 to $2.8 million for FY2023. Due to the loss, Katrina did not declare any dividends during the period.

Goh explains that during this period of consolidation, losses are bound to be incurred. While Katrina had to close down several outlets, it still incurred costs from rent, manpower and reinstatement. “We had to bite the bullet and close some restaurants,” he explains.

Katrina shares have been trading between 2.7 cents to 2.8 cents for the past 12 months. There was a period in September 2023 where its share price shot up to 5.2 cents but this fell to 2.7 cents on May 6, giving it a market capitalisation of $6.3 million.

Time to rationalise, consolidate

Moving forward, business consolidation will be one of the key focuses of the group’s F&B segment as it looks to channel resources to new outlets or better-performing outlets and close non-performing outlets.

So far, Katrina’s F&B brands target the masses and CBD corporate types. However, Goh has no intentions of entering the premium or high-end market. Instead, the company will focus on going out to “new hot spots”, such as Telok Ayer, where it recently launched Daily Beer. The group will also be opening a new F&B outlet in Paragon in May.

Furthermore, instead of merely providing a dining experience, Goh plans to introduce an entertainment element too. “Besides the fusion food that we serve here, we will also have a disc jockey come in and play music after 10pm, giving customers a more ‘happening’ experience,” he says, referring to the group’s Tomo Tokyo outlet in Clarke Quay.

As for the hospitality business segment, Singapore’s tourism sector is expected to continue its strong recovery next year, with international visitor arrivals to Singapore expected to hit 15 million to 16 million in 2024, according to numbers from the Singapore Tourism Board (STB). This bodes well for Katrina’s co-living properties. As Katrina grows its hospitality segment and eventually reaches a certain level of visibility and awareness, Goh has plans to sell franchise rights for the ST Signature brand.

Goh admits that the sector has been competitive while arrivals have yet to exceed pre-Covid levels although the recent events in Singapore have been supporting the arrival numbers. “We have new projects coming up and we are anticipating more tourists,” says Goh.

If more K-pop groups perform here, Katrina can ride on the K-wave for help once again.


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