Can YO! Sushi finally crack the US market?
The merger will create a combined company with sales of £336m, nearly two-thirds of which originate in North America.
Snowfox is the third largest sushi kiosk business in the US and operates over 700 counters across 25 states, primarily in supermarkets.
YO! is already one of the largest sushi companies outside Japan following its £52.9m takeover of the c.600-strong Canadian Bento Sushi chain in 2017 and acquisition of Waitrose sushi supplier Taiko Foods in 2018 for an undisclosed sum.
Snowfox’s chairman Jim Kim will join the board of the combined group, while remaining a significant shareholder.
YO!, which was founded in 1997 and now backed by Mayfair Equity Partners, believes there is a major growth opportunity across the pond. The US grocery sushi market is estimated to be worth over $1bn a year and is growing around 13% annually.
In February 2018 only 36% of US grocery stores provided frozen or fresh sushi to customers, which YO! sees as a gap in the market.
Breaking America
YO! previously tried to bring its kaiten belt restaurants to the US, starting with a site in Boston in 2016 and expanding to malls in Florida, New Jersey and New York. But it closed all the locations in 2018 following its acquisition of Bento Sushi.
UK restaurant groups have historically struggled to succeed in the US. PizzaExpress made an attempt in the early 2000's but closed its two sites in 2002 at a reported cost of £700,000. Carluccio's also shut its two restaurants in Virginia and Maryland in 2017 after just two years.
Noodle chain Wagamama is due to open its sixth company-owned restaurant, in New York, but The Times reported it is understood to be reviewing its options for the US business.
One success story looks to be Pret a Manger, which after a rocky start in the early 2000's now has 92 US sites and looks to be gearing up for growth following its £1.5bn sale to Krispy Kreme doughnuts owner JAB.
YO! says the Snowfox deal is part of a wider drive to “develop and diversify” its offer. In the UK the group is preparing to trial a restaurant without its iconic conveyor belt, and is piloting grab and go kiosks in Tesco.
