Sushi Ginza Onodera, a Japan-based chain with Michelin-starred restaurants, is planning an IPO in the U.S.
The company wants to raise $8 million by offering 1.1 million shares at $7 to $8 per share. At the midpoint of this price range, Ginza Onodera would be valued at $61 million. Founded in 2013, the brand has 10 units in Japan (nine in Tokyo and one in Kyoto), one in Shanghai, China, and one each in Los Angeles and Honolulu.
The restaurants follow a traditional Japanese style of sushi called “Edomae sushi,” which was founded a few hundred years ago in Tokyo, according to the company. Each piece is prepared using a variety of techniques, like salt, red vinegar, and soy sauce to marinate and cure the raw fish as well as boiling water to flash blanch the raw fish. The rice component is made with sake lees and aged red vinegar. U.S. locations import fish several times a week from the Toyosu Fish Market in Tokyo to ensure fresh authentic Edomae sushi.
Ginza Onodera’s itamae (skilled sushi chefs) have been recognized by the Michelin Restaurant Guide several times. The L.A.-based unit has received two Michelin stars for four straight years (2020-2023) and the now-closed New York-based restaurant was listed five times in a row (2018-2022).
Prices are steep. The chef’s special dinner course costs $300 at the Honolulu location and $400 in California, but the stores often have a waiting list.
In recent years, the chain has opened affordably priced establishments. The brand believes this business (all in Japan as of now) has the highest profile margin and growth potential. Where does that margin come from? The most popular product is the “Yamayuki Medium-Fatty Tuna,” priced at $4 per piece per plate. That’s about 10 times the price of other concepts. That’s combined with conveyor belt automation and low front-of-house labor costs.
The cheaper restaurants also help with staff training and turnover.
“The sushi industry has a high turnover rate, and it is very difficult to nurture artisans. Generally, it is said that sushi artisans need more than 10 years of training before they can make sushi, and many young apprentices cannot endure a long period of training and quit halfway through,” the company explained in an SEC filing. “However, we believe that by operating stores in different business categories and price ranges, we are able to give apprentices places to work and opportunities to learn according to their level of growth, and we can reduce turnover and nurture artisans by giving them opportunities to practice making sushi from an early stage of their career. By doing so, we can continue to provide customers with high quality products even as we open new stores.”
Going forward, Ginza Onodera will invest further in these higher-margin restaurants. One will open in Hawaii and another will pop up in Houston this summer. The restaurant believes this latest group of stores will attract a “younger generation who values the experience of a revolving sushi bar but also desires a more upscale and sophisticated ambiance at a more affordable price point.”
The goal is to debut roughly 30 locations in the next five years across the U.S., Japan, and China. Each will target a return on capital within 3.5 years of opening.
Sales grew 16.8 percent to $20.7 million in the year ended March 31. Net income lifted 17.4 percent to $2.2 million during the same period. Same-store sales dropped 4.6 percent in fiscal 2023, lapping 26.3 percent growth in 2022. AUV was $1.7 million, down from $1.8 million in the year prior. However, revenue per square foot was $1,132 up from $1,090. EBITDA was $2.4 million, an increase from $1.3 million in 2022. Operating margin was 6.3 percent.