Dominos Plan to Expand in Japan

Japan has been known to excel in advanced technology while maintaining its cultural heritage. With its savviest breakthroughs in making every technological breakthrough useful to everyday living, Dominos Pizza would like to take advantage of its creative inputs to delivering its quality pizzas to every Japanese home.

Dominos recently announced its plan of expanding the digital delivery service to Japan in the wake of its success in Australia and some parts of Europe. The pizza company has come into terms of a share sale agreement with Bain Capital worth more than $13 million to strengthen its strategy of providing the service. Bain’s expertise in the managerial side of the business would be a great support on its Japanese expansion.

The ASX-listed pizza company has more than half of its sales done online in Australia and would still grow just like its online sales at Europe though it cannot match Japan’s online sales growth which is expected to rise to 80 percent over the next three years as projected by its managing director, Don Meij.

With competitors like Pizza Hut and Pizza-La and other local pizza joints fighting over the biggest slice of Japan’s consumers, the strategy of setting up a smart phone application would widely appeal the tech-savvy Japanese market.

Dominos offering of $10.20 per share from $11.82 is seen as a strategy to promote funds for raising its capital to $156 million to partially fund the franchise acquisition in Japan and lend further $101 million to boost its target of having 600 stores in Japan with 40-50 stores opening every year. Currently, there are 263 stores operating in Japan.

The Dominos brand listed in ASX holds the exclusive rights of its store networks in Australia, New Zealand, France, Belgium, the Netherlands, and Monaco that has a strong network of 970 stores and is owned by the NYSE-listed Domino’s Pizza Inc.

Posted by Diane Araga, on August 29, 2013 at 12:00 PM