Japanese casual dining chain Watami closing 7 China outlets on coronavirus outbreak

06, Feb. 2020

Photo by Samuel Foster on Unsplash
Photo by Samuel Foster on Unsplash

HONG KONG, NNA – Japanese casual dining chain operator Watami Co. will close seven of its 11 outlets in mainland China due to a heavy blow to sales at the eateries from the continuing coronavirus outbreak.

The company has decided to shut the doors of seven directly-run restaurants under Watami, Kyo Watami and other brand in Shanghai, Guangzhou, Suzhou and Shenzhen, a spokesman told NNA on Wednesday.

The latest store opening was in December in Shanghai, he said.

The company has suspended the four other restaurants at dining facilities in Shanghai, where it takes on outsourced operations from corporate clients, he said.

Hit by the spreading Wuhan coronavirus outbreak, the restaurant chain operator suffered a 90 percent plunge in sales at the seven shops during the Chinese New Year holidays, the spokesman in Tokyo said.

The Japanese firm said in a statement on Tuesday it decided on the withdrawal from the Chinese market at a board meeting as the growing coronavirus infection is likely to be prolonged, pointing to the extreme uncertainties over the outlook for the Chinese economy.

It is assessing the impact of the store closures on its group earnings in the current business year to March, while arranging the timing of the withdrawal, it added.

In 2005, Watami opened its first mainland China restaurant in Shenzhen, Guangdong Province, through Hong Kong-based Watami International Co.

The company currently runs 53 outlets in eight countries and regions including Cambodia, Singapore, Taiwan and Vietnam, according to the firm.

The Watami group intends to expand its business in China in the mid- to long term and will continue to run the four outsourced dining spots, the spokesman said.