Sushi Ginza Onodera is hoping investors continue to be willing to bet on small restaurant chains.
The Tokyo-based concept has just 12 locations and is planning an initial public offering in the U.S., one in which it is projected to raise about $8 million if its stock prices at the midpoint of its expected range. It would be the latest in a series of IPOs involving small restaurant chains raising modest amounts of money.
The company plans to sell 1.1 million shares between $7 and $8 per share. At the midpoint of that range, it would raise about $8 million. It would trade on the Nasdaq Stock Exchange.
The company was founded in Tokyo in 2013. All but three of its locations are in the Japanese city. One is in Shanghai. Two are in the U.S., in Los Angeles and Hawaii. All are high-end restaurants that specialize in Edomae sushi, a type created in Tokyo in the early 1800s.
A night there is not a cheap date: Sushi Ginza Onodera California has a price range of about $400 and, the company boasts, “Our restaurants often have a waiting list.” Many of the chain's restaurants have earned Michelin stars.
The company operated a New York City location but closed that one in August, saying that it was too costly to operate profitably.
Sushi Ginza Onodera plans to expand in the next five years, with a location slated to open in Texas this year. Overall, it plans to open another 30 locations in the U.S., Japan and China over the next five years. The company plans to use proceeds from the IPO to pay off debt and fund capital costs.
The company generated nearly $21 million in revenue in its most recent full fiscal year, which ended March 31, up 17%. It also generated $2.2 million in net income.
Its restaurants average $1.7 million in sales per year and same-store sales declined 4.6% in its 2023 fiscal year, according to its filing. It reported an operating profit margin of 6.3%.
For a long time, small IPOs as this one had been largely closed off in the U.S. as institutional investors preferred larger and theoretically less risky bets. But recent years have seen smaller chains take their shots at the public markets, with some success.
Gen Korean BBQ raised $43.2 million in an IPO last year. The chain operated 34 units at the time of its offering. That one followed the successful 2019 IPO of Kura Sushi USA, which raised $41 million in its IPO.
Sushi Ginza is likely hoping to replicate Kura Sushi’s success. Its stock is up nearly 600% from its 2019 IPO price.
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