Japan investor pulls out of LifeBrandz restaurant deal
A JAPANESE investor has pulled out of a planned restaurant deal with Catalist-listed lifestyle investor LifeBrandz, the latter said in a bourse filing on Monday.
The investor, Japanese chef Kaji Mitsuyoshi, had on Feb 28 agreed with LifeBrandz's wholly-owned subsidiary LB F&B to incorporate a new company, Kaji F&B, and open a high-end Kappo-style omakase restaurant by the end of the year, with Mr Kaiji as head chef.
He was a chef at one Michelin Star restaurant Shinji by Kanesaka in Singapore until Mar 16, 2020. (see amendment note)
The omakase restaurant was meant to replace Hashida Sushi Singapore at 25 Mohamed Sultan Road, another Japanese restaurant run by LifeBrandz's wholly-owned subsidiary, Cloud Eight.
Hashida Sushi was permanently closed on April 30 due to poor response for takeaway services during Singapore's "circuit-breaker" period. Sales generated from Hashida Sushi's takeaway services were insufficient to cover costs, LifeBrandz had said in May.
It added then that, with the proper marketing strategy, the omakase restaurant would likely attract more customers than Hashida Sushi due to its pricing and food variety, given the economic outlook for 2020.
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LifeBrandz also expected an improved profit margin for Kaji F&B due to lower costs, including fewer headcount and lower operating costs, compared to Hashida Sushi.
It added that it intended to expedite the opening of Kaji F&B, with minor renovations on Hashida Sushi commencing in June.
Pursuant to the terms of the agreement, LB F&B and Mr Kaji were supposed to incorporate Kaji F&B by May 31, a deadline they mutually agreed in May to extend to Aug 31.
LifeBrandz on Monday said Kaji F&B had not been incorporated in light of the Covid-19 outbreak.
"After preliminary discussions, the group has been informed by Mr Kaji of his intention to discontinue the investment," it said. "The group is currently discussing with Mr Kaji about the way forward."
Under the deal, Mr Kaji had in March deposited S$200,000 into the bank account of LB F&B as prepayment for 200,000 shares in Kaji F&B, representing a 20 per cent stake, with LB F&B holding the remaining 80 per cent.
LifeBrandz had in February said the investment was in line with the group's strategic plans of acquiring new and varied food and beverage businesses and pursuing new revenue streams.
"The board believes that the investment is beneficial to the company and its shareholders as it will enable the group to tap on the expertise of Mr Kaji and provide an additional income stream to the group," it said then.
Shares of LifeBrandz sank 50 per cent or 0.2 Singapore cent to 0.2 cent as at 10.57am on Tuesday.
Amendment note: An earlier version of this article stated that Mr Kaji is an assistant head-chef at Shinji by Kanesaka, according to Lifebrandz's Feb 28 filing. The restaurant has clarified that Mr Kaji stopped working there as at Mar 16, 2020, and that his last designation there was as a chef.
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