By Aimee Chanthadavong
It already has stores in Australia, New Zealand and parts of Europe. Now, Domino’s Pizza (DPE) is tapping into the Japanese market.
The company has paid $236 million for a 75 per cent share in Domino’s Pizza Japan (DPJ) from the current owner, Bain Capital Domino Hong Kong, an entity advised by Bain Capital Partners and its affiliates.
DPJ is currently the third largest pizza delivery chain in Japan with 259 stores but there are plans to grow that network to a target of 600 stores.
DPE managing director and CEO Don Miej said the acquisition will increase DPE’s total store network to over 1,200 stores.
“Japan is a strategic location for DPE’s future expansion, providing access to a large market which is well suited to significant new store rollouts and the relocation of stores to higher traffic locations with improved image and formats,” he said.
“We look forward to the ability to introduce DPE’s product expertise, innovation and digital leadership to Japanese customers.”
This acquisition follows the company’s reported underlying net profit after tax of $30.4 million, an increase of 13 per cent on the previous years. Its profit was generated from total network sales of $848.6 million.
Meij attributed the results to product innovation and its digital platforms, including its mobile app and online ordering platform that has helped the company achieve over 50 per cent of sales.
“Our solid performance for the 2013 full year is the result of product innovation, rolling out new products including the biggest product launch in 20 years with the addition of our new Chef’s Best range and the successful launch of the Artisan pizza range in France,” he said.
“The results also reflect our commitment to providing our customers greater accessibility and flexibility around ordering platforms, particularly in the current global environment.
“We have made it a strategic priority over the past 12 months to be more accessible to our customers through a comprehensive range of online ordering interfaces, including improved platforms to showcase our product range, all using HTML5 technology, a new iPad and Facebook App.”
Outside of the Domino’s Japan acquisition, looking forward, the company will continue to push digital sales with its recent upgrade to HTML5 technology in Australia/New Zealand. It has also predicted it will deliver an EBITDA in the local region of 15 per cent.
The European market will be similarly busy with the continued rollout of the Pulse POS system, as well as the move to HTML5 technology which will see the majority of ANZ systems implemented into The Netherlands business by December 2013.
According to Meij, Dominos continues to work towards the goal of achieving 80 per cent of its business through online sales.
“Our digital business continues to set Domino’s apart from our peers and we will strive to grow this area even further in H1 14 through aggressive online, print, point of sale and our biggest television and marketing campaign in two years.”