Aspirant exits Japanese fish retailer to local strategic

The size of the transaction was not disclosed. Aspirant acquired Yamato in early 2017 through its second fund, which closed the same year on JPY 27.2bn (USD 192m). The firm typically targets businesses with enterprise values of JPY 3bn-JPY 30bn. Like most of Aspirant’s investments, this was a succession situation where there was a dearth of in-family candidates to take over from an ageing founder.

Aspirant’s value creation agenda included the introduction of a management information system, the establishment of a new central kitchen, the renovation and opening of more restaurants, and a complete makeover for retail facilities aimed at the tourist market, according to a statement.

Yamato was founded in 1981 by a fisherman keen to move into distribution. The company expanded from wholesale to retail stores to conveyor belt sushi restaurants and casual dining izakayas. Securing a position in Tokyo’s Toyosu wholesale market – then located in the Tsukiji district – in 1997 supported these efforts because it facilitated the sourcing of fish and shellfish nationwide at affordable prices.

Chiba prefecture, situated on Japan’s east coast, remains Yamato’s stronghold. The company has direct relationships with ports, which brings down the cost of fish and ensures freshness. Rice and most condiments are sourced locally as well.

When Aspirant invested, there were five wholesale outlets, six retail stores, 14 conveyor belt sushi restaurants, and five izakayas. Wholesale, retail, and restaurants each accounted for about one-third of revenue. In addition to building up internal systems and processes, the GP sought to contain declining sales through a restructuring that saw the closure of six restaurants and two wholesale outlets.

Aspirant also increased salaries and reduced working hours of Yamato’s predominantly contract-based workforce to attract new recruits. This was done with the expectation that other reforms – centralising procurements and shipments, standardising practices like inventory management – would deliver efficiencies and improved productivity.

At the same time, the company shifted from paper-based to integrated digital systems. This made it easier for management to set key performance indicators (KPIs) and figure out where to pursue growth. Yamato opened three new restaurants and renovated a further five. As of last year, there were three wholesale and six retail outlets, 11 conveyor belt sushi restaurants, and two izakayas.

Progress was disrupted by Typhoon Hagibis in 2019, the strongest tropical cyclone to hit Japan in decades. It spawned a tornado that hit Chiba and conditions were worsened by a near-simultaneous earthquake off the coast. Cumulative damage amounted to USD 15bn; for Yamato alone, the cost was USD 2m, Taichi Nakamaru, a principal at Aspirant and formerly CEO of Yamato, told AVCJ last year.

“There was property damage, rooftops were blown off, and we had to protect employees,” he said. “But these stores were also trying to capture tourists. After the typhoon, tourists stopped coming.”

COVID-19 arrived not long after the effects of Hagibis receded. Facing substantial operating losses, Yamato adapted where it could, for example by doubling the takeout and delivery share of revenue to 20%. It returned to profit in three months.

The company’s sales were JPY 6bn when Aspirant invested. They recovered from JPY 4.8bn in the 12 months ended May 2020 to JPY 4.9bn in 2021 and JPY 5.5bn in 2022, according to a filing. A net loss of JPY 5,800 in 2000 became a net profit of JPY 1,600 in 2021 and JPY 10,200 in 2022.

Tenpos, which generated revenue of JPY 31.3bn in the most recent financial year, sees Yamato as complementary to an offering that includes kitchen equipment and suppliers, store design and financing solutions for commercial customers, and a restaurant business. The company wants to generate JPY 100bn in revenue from food and beverage-related businesses as soon as possible.

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• Topics
• North Asia
• Consumer
• Trade sale
• Japan
• Aspirant Group