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From an office in London’s Farringdon Road, the company that has arguably done the most to convert the British to a Japanese diet is now setting its sights on converting America.
Last month Robin Rowland, Yo Sushi’s chief executive, and Alison Vickers, the company’s international development manager, traversed North America looking at sites and talking to potential partners.
Their aim is to open up to 300 Yo Sushi restaurants, in which a conveyor belt of food tempts diners to help themselves to sushi, sashimi, nigiri, gyoza and other staples of Japanese cuisine.
The chain has proved a huge success in Britain, where Yo now has 20 units and expects to open another five next year. Pre-tax profits are expected to reach £2.5m this year.
While chains such as Pizza Express and Café Rouge have faced tougher times, Yo has gone from strength to strength. It now has restaurants in France and Dubai, where hot dishes and hamour, a local fish, are the big favourites.
But America is where Rowland hopes Yo can really make its mark. Almost half of every dollar Americans spend on food is spent in restaurants, according to the National Restaurant Association (NRA).
With more than 900,000 food outlets, competition is fierce and so is the potential reward. Next year American restaurant sales are expected to pass the $500 billion (£282 billion) mark for the first time, according to the NRA’s 2006 forecast.
These days British restaurants are renowned all over the world and eating out is far more common, but the market here still lags America in relative size and growth. According to the British Hospitality Association’s annual report, there were 25,964 restaurants operating in 2003, compared with 25,832 in 2001. The average number of meals eaten out remained fairly stagnant from 2001 to 2003. The restaurant industry served some 702m meals in 2003, up from 688m in 2001.
Yo is not the first, nor will it be the last, to look to America for richer pickings. Wagamama, the noodle chain, and La Tasca, the tapas group, are also opening there.
The potential rewards in America are immense, but so are the risks. “Americans don’t give you a second chance,” said Vickers. She speaks from experience. Vickers opened the ill-fated Belgo restaurant in New York, an offshoot of the Belgian-themed London restaurant.
“We are very conscious of what has happened to British companies that have gone to America and failed to listen to what people there really want,” she said. “We’re going to take our time about it and make sure this works.”
Most recently Pret a Manger has shown how difficult the move can be. Despite its enormous success in Britain, Pret has struggled in America. McDonald’s bought a 33% stake in the sandwich company in 2001 but the group seems to have benefited little from the American burger giant’s expertise in opening restaurants. Pret’s New York shops should be profitable next year but talk of a nationwide rollout has faded.
Yo’s Rowland said: “We will not be flying the flag. I don’t think it matters where you come from. The only way to be successful in a new market is to bring them something exciting and novel.”
Vickers said: “I think it’s best to avoid New York for the time being. The city seems to have a sushi bar on every other corner.”
Yo has been talking to potential partners about opening sites in Boston, Los Angeles and Washington and hopes to sign a deal in one of those cities early next year. The plan would be to build a base in, for example, Los Angeles, before seeking other partners to roll out the concept elsewhere.
Japanese cuisine is well established in America, but surprisingly there are no national chains of sushi restaurants. Rowland hopes that Yo can plug that gap, offering a consistent, high-quality venue for sushi lovers.
“It’s important to pick the right partners,” he said. “I’ve worked with enough big food companies to know that some of them don’t give a damn about the food. That would be a disaster for us.”
Simon Woodroffe, the Dragons’ Den TV star and entrepreneur, opened his first Yo business in 1997 in Soho, London. The restaurant was a hit, and within two years Yo had four restaurants in London and was being heralded as the most exciting new restaurant brand.
Woodroffe was inundated with calls from people wanting franchises and joint ventures and has said he wasted far too much time chasing deals he was not ready for.
He appointed Rowland, a veteran restaurant executive, in 2001 and in 2003 sold a controlling stake to Primary Capital, a venture-capital firm.
The company is aiming for sales of about £20m next year, rising to £50m by 2008. After that it might look at floating the group, Rowland said. Yo’s management holds 17% of the company, a big incentive to make it work.
“There’s some real rock’n’roll to our concept,” said Rowland. “I am convinced we can make it work in America.”
But first he has to prove this fish can cross the Atlantic.
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