Skylark Holdings - Company History

The company began in April 1962 as Kotobuki Shokuhin, a grocery store facing a new public housing estate in Hoya, on the western edge of Tokyo. Four brothers raised in Suwa, Nagano — Yokokawa Hajime, Kayano Ryo, Yokokawa Kiwamu and Yokokawa Norio — ran it themselves, with the third brother driving to the Tsukiji market before dawn to buy dried fish, salted salmon and preserves for the counter. The capital was $5,556 (¥2m). The store did well with the housewives of the estate, but retail’s ceiling arrived quickly: once large supermarkets spread in the late 1960s, a small fresh-food shop had no way to win on price.

The brothers looked to the chain restaurants they had seen in the United States. In July 1969 they converted Kotobuki Shokuhin into a joint-stock company built to run many outlets, and in July 1970 opened the first Skylark in Fuchu, western Tokyo — a family restaurant with a large car park, on a suburban site, at a time when that combination was still novel in Japan. Motorization and the rise of the nuclear family did the rest. American-style chain operation and a standardized store let them add outlets fast, and in November 1974 the company took the name of its own brand.

Skylark effectively created the family restaurant as a Japanese industry. A central kitchen opened in 1977 to cook centrally and ship semi-prepared food to the branches. Registration on the over-the-counter market followed in July 1978, a listing on the Second Section of the Tokyo Stock Exchange in August 1982, and promotion to the First Section in June 1984. Wary of depending on one brand, management began adding others — Jonathan’s from 1979, the Japanese-food Aiya in 1985, the Chinese-food Bamiyan in 1987 — assembling what it called a conglomerate of food, chains separated by cuisine and by price point. New formats were treated as a batting average: ten at bat, one hit. Most failed and closed, but one format that grew to ¥100 billion in annual sales paid for all the misses.

The bubble’s collapse turned the restaurant market over. Consumers tightened, and Skylark posted lower recurring profit two years running, in the years to December 1992 and 1993, with customer counts at existing stores falling below the prior year. President Kayano Ryo put it bluntly — companies are said to live thirty years, and at twenty-five Skylark had grown tired. The structure was heavy as well as tired: large stores on expensive sites, refurbished at a cost of ¥10 billion across some 300 outlets in the late 1980s but never fundamentally rethought while the bubble covered for them. Watching Walmart break prices in the United States, Kayano concluded that Japan too had large demand for a purely functional everyday meal out — and that the way back to the customer was down, not up.

The answer was Gusto, opened in March 1992: a third of the menu items, an average spend cut by about ¥300 to $6 (¥760), self-service in place of seating guests, and a retreat from expensive locations. Converted stores drew 170% of their prior-year customer count in the first half of 1994, and rivals across the industry followed the format down. In August 1994 Skylark announced that every Skylark restaurant would be converted to the new Skylark Gardens format and others, retiring the founding brand — “Skylark’s mission is over,” Kayano said. The two years of falling profit reversed at once in the year to December 1994.

The point was not simply cheapness but a portfolio arranged by price. A mid-priced casual format opened in September 1994 to sit above Gusto, and group sales passed ¥200 billion in the year to December 1993 on the strength of Jonathan’s, Aiya, Yumean and Bamiyan alongside it. The family restaurant that had once numbered some 800 outlets shrank as its role passed to Gusto, and the original brand disappeared entirely by the second half of the 2000s — later than the 1996 the company had announced, but as promised.

In 2006 the founding family took the company private in a management buyout worth more than $2.3B (¥270bn) — among the largest ever done in Japan. A tender offer in July was followed by delisting from the First Section in September. The logic was time: closing unprofitable branches and rebuilding a store network weighted toward large formats was hard to attempt under quarterly share-price pressure, and the interest-bearing debt built up over the expansion years needed the same patience. Nomura Principal Finance and CVC Capital Partners supplied the money; the acquisition vehicle merged with Skylark in July 2007 and took its name.

Trading did not recover quickly. As recession cooled demand, the founding family and the funds fell out over the pace of the rebuild, and in 2008 the two large shareholders demanded the resignation of President Yokokawa Kiwamu, citing poor results. Tani Makoto, an executive raised inside the company, replaced him — ending management by the founding family that had run unbroken since the grocery store. Under Tani the last Skylark restaurants closed in October 2009 and the branch network consolidated onto Gusto, with unprofitable stores shut and the cost base reworked.

In 2011 the American fund Bain Capital bought the shares from the Nomura side and became the parent. Tani and Bain rebuilt earnings around Gusto, rebalanced the store portfolio and reworked the menu, and in October 2014 Skylark returned to the First Section of the Tokyo Stock Exchange after eight years and one month away. Its market value on relisting came to about ¥220 billion — short of the sum spent taking it private, but the point at which the private-equity rebuild was handed back to public shareholders.

The relisted company separated strategy from operations. An operating subsidiary, Skylark Restaurants, was set up in September 2015; the holding structure took effect in January 2016; and in July 2018 the parent became Skylark Holdings. Beneath it sat Gusto, the largest format, with Jonathan’s, Bamiyan, the Japanese-food Yumean and the shabu-shabu chain Shabu-yo — the same conglomerate-of-food design, chains divided by cuisine and by average spend, that the brothers had begun assembling in 1979. The company moved from the First Section to the Prime Market in April 2022.

The pandemic then hit the format at its most exposed point. Consolidated revenue fell from ¥375.4 billion in the year to December 2019 to ¥288.4 billion in 2020, with a net loss of $161.1M (¥17bn). Skylark closed unprofitable branches, cut late-night hours and compressed fixed costs — and reached for automation, rolling cat-shaped serving robots out to almost every restaurant in Japan to hand table service and clearing to machines, easing both labour shortage and contact. Delivery and takeaway added revenue that did not depend on filling seats. It was the low-cost thinking of the Gusto conversion, reworked with digital tools.

Growth investment resumed as the pandemic receded. Shabu-yo opened its first outlets in Malaysia in 2020 and the United States in 2021 through subsidiaries established in 2018, and in October 2024 the group acquired Sukesan, a udon and rice-bowl chain from Kitakyushu, adding a format from outside its own development pipeline. Consolidated revenue passed ¥400 billion for the first time in the year to December 2024 and reached a record ¥457.8 billion in 2025, with net profit recovering to ¥16.7 billion. Six decades after four brothers opened a grocery store, the habit of rebuilding the format whenever the market turns is still what drives the company.