SINGAPORE – Japan Foods, the parent company of well-known franchises like Ajisen Ramen, is considering further closures of its restaurants as part of an ongoing effort to streamline operations and manage costs. This comes after the company reported a loss of $2.9 million for the nine months ending December 31, 2024.
In its financial results filed on February 6, Japan Foods revealed it had already reduced its number of outlets from 84 to 82 by the end of 2024. The company stated that it continuously monitors the performance of its restaurant network and may choose not to renew leases for underperforming stores once they expire.
“As part of its strategy for managing its restaurant portfolio, Japan Foods regularly evaluates the performance of individual stores and may implement rebranding initiatives to better align with local demographics and enhance overall performance,” the company explained in a response to The Straits Times.
Japan Foods operates a range of franchised brands, including Menya Musashi, Osaka Ohsho, and Kumachan Onsen, a teddy bear-themed hotpot restaurant. It also owns self-developed brands such as Tokyo Shokudo, Fruit Paradise, and Milan Shokudo.
The company’s revenue decreased by approximately $400,000, while selling and distribution expenses surged by more than $4 million. In light of these challenges, Japan Foods announced plans to refine its brand portfolio, focusing on more established and successful brands.
The company also intends to ramp up marketing efforts to attract more customers, such as offering seasonal promotions and discounts during off-peak hours. Japan Foods emphasized its commitment to staying relevant by keeping its brand portfolio dynamic, responding to evolving food trends, and exploring new franchise opportunities with popular Japanese brands.
The broader food and beverage sector in Singapore has been grappling with various pressures, including the strength of the Singapore dollar, which has led to more locals traveling and spending overseas, particularly in Japan. Japan Foods acknowledged that its business environment remains difficult, compounded by industry-wide challenges such as labor shortages, rising operational costs driven by inflation, and shifting consumer preferences.
For the third quarter of the 2025 financial year, the company’s revenue fell by 0.6% to $64.9 million, primarily due to weak sales in November and December 2024. Meanwhile, selling and distribution expenses rose by 8.3% to $4.1 million, largely due to higher labor costs, utility expenses, and depreciation of right-of-use assets.
Additionally, other operating expenses increased by 90%, or $0.7 million, due to the write-off of plant and equipment, a result of restaurant rebranding, closures, and the relocation of a store within VivoCity.
In comparison to a net profit of $0.7 million in the same period last year, Japan Foods posted a net loss of $2.9 million for the third quarter of the 2025 financial year.
On February 7, Japan Foods’ shares closed at 33 cents, down 1.5% from the previous close of 33.5 cents.
Sue-Ann Tan is a business correspondent for The Straits Times, covering capital markets and sustainable finance.
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