After failing to attract enough repeat customers despite offering all-you-can-eat deals, 16 restaurants under the popular Japanese brand Okami went into administration across Australia this week. The affected restaurants are company-owned sites in Australian Capital Territory (ACT), New South Wales (NSW), Victoria, and South Australia.
The founder of Okami, Jimmy Wang, has cited increasing operational costs due to the COVID-19 pandemic and inflation as the reasons for the collapse. The voluntary administration has been undertaken by audit, tax, and advisory firm Grant Thornton, with Phillip Campbell Wilson and John McInerney named joint administrators. They pledged to maintain operations through the Christmas period.
Wang informed the administrators that there was a lag effect from the pandemic combined with inflationary pressure on costs that led to a decline in sales and increased operational costs, contributing to the collapse, according to Mr. Campbell-Wilson.
It’s expected that the Australian Taxation Office and related entities are likely to be major creditors of Okami, but this is subject to further investigation. The collapse has affected around 250 staff.
Despite the collapse, the restaurants are committed to funding the pre-appointment wages to ensure that all employee wages are up-to-date. “We have committed to funding the pre-appointment wages, ensuring that all employee wages are up-to-date,” Campbell-Wilson explained.
In earlier podcast interviews this year, Wang highlighted challenges such as high construction costs, delays in opening, and the expense of staff due to the shortage of people with culinary skills. Okami is well-recognized for its all-you-can-eat menu, which consists of over 30 different dishes and allows patrons to eat as much as they like for a single payment.
Showing remarkable resilience, Mr. Wang opened his first store in 2013 and switched from studying engineering to commercial cookery in order to solve family financial problems. Despite these challenges, he aspired to open 100 restaurants across the country.
Okami expanded its operations from Hampton, Victoria, to Caulfield in 2015 and later to NSW, Queensland, South Australia, and the ACT. Mr. Wang also established the Oak Leaf Education Institute in Melbourne was established to train both domestic and international students in kitchen and hospitality management and cookery to help overcome the shortage of skilled staff.
Around 54,000 cafes and restaurants were in operation in Australia at the end of the 2023 financial year, with revenue in the sector consistently rising until the COVID-19 pandemic in 2020. Nonetheless, it had recovered by 2022. Australians spend an average of A$126 per week on hotels, cafes, and restaurants.
Despite its financial difficulties, Okami remains a beloved brand in Australia and has made significant contributions to the culinary education sector. The administrators are hopeful of preserving its business value and considering a formal restructuring plan that might just pave the way for its comeback.
