■Company Overview

1. Business content

SFP Holdings ＜3198＞ mainly operates “Isomaru Fisheries” (seafood izakaya) and “Toriyoshi Shoten” (chicken specialty store), etc., which have become popular business categories due to 24-hour business* in front of the station and downtown area (roadside stores), etc., and is also focusing on developing a popular bar business type where stable income can be earned with low investment as the second pillar. Since 2020, the impact of the COVID-19 pandemic has cast a shadow over the entire industry, but the current business performance is steadily recovering as we strengthen our profit structure and respond to environmental changes.

*Depending on market characteristics, etc., some stores are not open 24 hours a day.

The business segment is a single segment of the food and beverage business, and in addition to the “Toriyoshi Business Division,” which is the founding business type, the “Isomaru Business Division,” the main business category, and the “Other Division,” which includes new business categories, contributions by alliance members (consolidated subsidiaries) * were added from the 2020/2 fiscal year, and they are divided into 4 categories. The “Isomaru Business Division” accounts for approximately 60% of sales. The store opening area has developed mainly in Tokyo and the Tokyo metropolitan area, but they are also working on opening stores in regional cities.

* It consists of 2 companies: Joe Smile Co., Ltd. (Kumamoto) and Crook Dining Co., Ltd. (Nagano). The aim is to expand store openings in regional cities (provision of brands in FC format within the group) through the use of M&A.

2. Company Features

The company's advantage is that it has established a new unique profit model in addition to the profit model of the normal izakaya business. “Isomaru Fisheries,” the main business type, is characterized by a unique profit model that makes maximum use of the ability to attract customers due to its prime location, such as a unique and highly visible façade, an open atmosphere that is easy to enter, and capturing a wide range of demand through 24-hour business, while turning it around at a high operating rate. In simplified terms, it can be said that it is a structure where leverage can be applied by securing a lot of sales even when paying high rents that are unprofitable with the profit model of a normal izakaya business type. Of course, in addition to location analysis schemes and roadside store development skills, it is only possible if there are operations in 24-hour business, know-how to replace with an optimal menu depending on the time of day, etc., and it is not something that can be easily imitated. In particular, it is thought that the high cost of opening a store and the difficulty of operating 24 hours a day are high hurdles for other companies. A virtuous cycle has been created for the company, where it has accumulated know-how ahead of other companies and has increased its brand power by opening stores centrally in the Tokyo metropolitan area, further lowering the risk of opening stores. Traffic control, shortened business hours, restrictions on the provision of alcoholic beverages, etc. associated with the COVID-19 pandemic have had an impact that counteracts some of the features of “Isomaru Fisheries” (prime location in front of the station, high rotation, capture of a wide range of needs due to 24-hour business, etc.), but they are only due to policy force majeure due to the COVID-19 pandemic, and there is no major change in the superiority of the profit model itself. With the end of the COVID-19 pandemic, existing stores have returned to pre-COVID-19 levels.

Also, there is plenty of room for further evolution by applying the profit model established by “Isomaru Fisheries” (hereafter, the “Isomaru Fisheries” model) to other business categories. “Toriyoshi Shoten” was able to transplant the “Isomaru Fisheries” model into “Toriya,” which is the type of business it was founded, and put it on track. In particular, the point is that it is possible to open stores in duplicate with “Isomaru Fisheries” (open stores at the same time or in an area where stores have already been opened) and select stores according to market characteristics (location/business type). Furthermore, the idea is to flexibly respond to necessary tuning (fine adjustments) in accordance with environmental changes (changes in consumer behavior, etc.) after the COVID-19 pandemic has ended (hereinafter, after COVID-19), and the attitude of pursuing such hypothesis verification type evolution can be said to be the true value of the company. In addition to starting the “torotaku” business type where it is possible to open a store at an existing location of “Isomaru Fisheries” while further enhancing dietary efficiency, it can also be said that it is part of this that it clearly indicates the direction of focusing on the popular bar business type that can earn stable income with low investment due to its compactness and high rotation while utilizing the strengths of “Isomaru Fisheries” due to its location in front of the station and on the road surface.

3. HISTORY

The company's founding dates back to 1984/4, when the founder, Mr. Samukawa Ryosaku (former chairman and representative director of the company, retired in 2015/12), opened a fried chicken wing specialty store “Toriyo” in Musashino, Tokyo. The signature menu was Nagoya's specialty deep-fried chicken wings arranged with a unique recipe, and the number of stores steadily increased. In 2001, the vision was to “aim for a comprehensive food service industry that creates rich food,” and while working to diversify business categories, the business expanded to a company-wide 50-store system in 2008.

After that, in response to the effects of the economic recession due to the Lehman shock, etc., and changes in the industry environment, etc., the vision was changed to “aim for a 'food' specialty store group that enriches Japan,” and when they steered to the pursuit of “specialty stores,” they opened “Isomaru Fisheries” with a unique profit model in 2008, laying the foundation for growth.

Since “Isomaru Fisheries” has been successfully launched and the path to growth has come into view, it was determined that aiming for listing is the shortest path in order to “create a permanent corporate organization.” Furthermore, in 2010/12, we received capital participation from Polaris No. 2 Investment Limited Partnership (Polaris Capital Group Co., Ltd.), which is a PE fund, and it was decided to improve the accuracy of business management and organizational operations through the introduction of objective perspectives and rational methods.

In 2013/4, a capital alliance was formed with Create Restaurants Holdings (3387), which mainly operates restaurants and food courts in suburban shopping centers, and became a consolidated subsidiary. When the stock was listed on the 2nd section of the Tokyo Stock Exchange (hereafter, Tokyo Stock Exchange) in 2014/12, the market changed to the 1st section of the Tokyo Stock Exchange on 2019/2/28 (transition to the “Tokyo Stock Exchange Prime Market,” which is a new market category from 2022/4/4). Also, during that time, it transitioned to a holding company system in 2016/9, and along with that, the trade name was changed to SFP Holdings Co., Ltd. in 2017/6, and it is now in its current form.

Following the stock listing, the pace of opening stores by “Isomaru Fisheries,” which has established brand power as a popular business category, was spurred, and the “Isomaru Fisheries” 100 store system was reached in 2015/5. Also, FC development of “Isomaru Fisheries” has also started* in Nagoya City, Aichi Prefecture, and the opening of a “Toriya Shoten” store has also started.

*FC development of “Isomaru Fisheries” started in Kyushu (Fukuoka Prefecture) in 2017/6 and in Hokkaido in 2022/12.

In the 2020/2 fiscal year, we also worked on expanding store openings to regional cities through M&A (providing brands in FC format within the group) based on our own “alliance concept.”

(Written by FISCO Visiting Analyst Ikuo Shibata)