이 기사는 2020년 05월 29일 08:00 thebell 에 표출된 기사입니다.

SkyLake Investment is emphasizing a premium brand image and potential growth through the expansion of delivery services to attract prospective buyers for its Outback Steakhouse Korea.

Credit Suisse, which is running an auction process for Outback Steakhouse Korea, distributed an information memorandum to potential bidders earlier this month. In the 122-page long document the seller emphasized the word “premium”, underlining a change in the company’s brand image from a family restaurant concept to a premium steakhouse.

SkyLake Investment acquired Bloomin' Brands’ Korean unit of Outback Steakhouse restaurants in 2016. Under the private equity firm’s ownership, the restaurant chain added a T-bone steak on the menu and replaced frozen meat with fresh chilled meat. As a result, revenue from steak increased as a percentage of total revenue grew by 20 percentage points in the four years to 2019.

This led to earnings growth with the company’s revenue increasing at a compound annual growth rate (CAGR) of 8.8 percent in the same period. This contrasts with peer companies – VIPS, Ashley and TGI Friday’s – seeing negative growth. Outback Steakhouse’s per person average (PPA) spending increased to 26,147 won in 2019 from 19,209 won in 2016.

The growth potential of the delivery business was also emphasized with the seller identifying it as “a new growth pillar” in its information memorandum.

Outback Steakhouse started delivery services last summer to serve demand from consumers who want to order western food for delivery. SkyLake Investment focused on the fact that only a fraction of western food consumed in the country was served through delivery.

To expand its delivery business, Outback Steakhouse is to increase the number of its cloud kitchens where restaurants operate for online delivery only. It currently has six cloud kitchens and plans to increase the number to 15 by 2020 and 160 by 2024. The seller expected the company’s revenue from cloud kitchens to jump from 6 billion won in 2020 to 106 billion won in 2024 with a CAGR of 77 percent.

It took five months for Outback Steakhouse’s first cloud kitchen to hit the break-even point and only two months for its sixth cloud kitchen. As of March 2020, the company’s first cloud kitchen recorded earnings before interest, tax, depreciation and amortization (EBITDA) margin of more than 22 percent, with EBITDA margin for its other five cloud kitchens exceeding 10 percent.

“The future growth potential of Outback Steakhouse Korea with its focus on delivery services appears to be one of the key factors that could attract investors,” an industry insider said.

The first round of bidding for the entire stake in Outback Steakhouse is scheduled on May 29. Currently Lakeside Dining, a special purpose vehicle (SPV), owns 100 percent of the company, with SkyLake Investment holding 90 percent of the SPV and two executives of Outback Steakhouse holding the remaining 10 percent.

(Reporting by Byung-yoon Kim)