SINGAPORE (Mar 12): While cautious consumer spending and rising costs have eaten into the margins of many F&B businesses, Japan Foods Holding has managed to widen its net margins by leveraging its large portfolio of Japanese F&B brands. For 9MFY2018 ended Dec 31, the company reported a net margin of 9.4%. This was an improvement from the 8.1% net margin for the same period of FY2017. It was also higher than the company’s net margins of 7.1% and 6% in FY2017 and FY2016, respectively. Although Japan Foods’ revenue for the nine-month period grew just 2.8% y-o-y, to $51.7 million from $50.3 million previously, earnings jumped 18.1% y-o-y to $4.8 million from $4.1 million.

Japan Foods executive chairman and CEO Takahashi Kenichi tells The Edge Singapore that the company has been able to successfully convert underperforming outlets to brands that perform better. “After one to two years, if customers don’t like this brand and we feel that it doesn’t match the target market, we can change to other brands,” he says.

At Junction 8, Japan Foods converted a Kazokutei restaurant into an Osaka Ohsho outlet in January last year. Kazokutei is an udon chain originating from Osaka, while Osaka Ohsho is a gyoza specialist. At Bedok Mall, the company converted a Menya Musashi ramen restaurant into an Ajisen Ramen branch in March. At Clementi Mall, the company converted a New ManLee Bak Kut Teh restaurant into a Menya Musashi restaurant in April. At Ngee Ann City, the company converted an Ajisen Ramen outlet into a Menya Musashi restaurant in November.

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