New CEO cooking up a fresh strategy at struggling LifeBrandz

Hiroyuki Saito is confident he can put group back in the black by the middle of next year

Singapore

HOW and why does a Japanese teacher-turned-business consultant, living in Singapore for just over half a decade, decide to take over a loss-making group best known for a string of failed Clarke Quay nightspots?

It may sound like a tall order. But Hiroyuki Saito, newly-minted chief executive and executive chairman of LifeBrandz, is sure he can put the group back in the black by mid-2019.

And he plans to do so by transforming the erstwhile entertainment group with new digital businesses, backed by an expansion into the Japanese food and beverage (F&B) scene.

The 51-year-old arrived on the scene last April, when his investment vehicle Bounty Blue Capital scooped up a 9.14 per cent stake from then CEO Chng Weng Wah and wife Catherine Chan, for roughly S$1.82 million. Mr Saito has since built his interest up to 17.77 per cent.

Mr Saito, who was a high school PE teacher in the late 1980s, has reinvented LifeBrandz as an investment holding company that last year paid S$850,000 for Japanese travel firm e-Holidays. It also moved into the business of robo-advisory services, by setting up subsidiary Finesse Digital.

Manager and interpreter Taiyoshi Saito, no relation, said: "His friends introduced him to the opportunity to acquire a Catalist-listed company, LifeBrandz. It had been listed for years, but immediately, he decided to buy this company from the former CEO.

"He made a very quick decision because it was one of his objectives to have his own, to be the CEO of a listed company and to run the company, in Singapore."

As to why a listed company, Mr Saito made no bones about it: "It's the easiest way to raise funds. If you have a listed company - for example, we've done a rights issue - only a listed company can do this kind of thing."

A rights-cum-warrant issue last year yielded proceeds of S$2.93 million, while a share placement exercise netted S$484,000. The company had S$454,000 left in its kitty from the two fund-raising rounds, as at Jan 31.

While LifeBrandz made its name in nightlife - and still runs an Irish-themed pub in Thailand's tourist hot spot of Pattaya - Mr Saito has pinned his hopes on Japanese fine dining in San Francisco and New York.

Never mind that San Francisco already boasts eateries such as the Michelin-starred Keiko à Nob Hill, while the 2018 guide gives New York the highest proportion of starred Japanese restaurants outside Japan.

"We don't really see high-quality, high-end sushi restaurants in those two cities," said Mr Saito, adding that "it's super competitive if you have a sushi restaurant in Asian countries - there are so many".

But he is also eyeing mergers and acquisitions when it comes to Japanese food in Singapore. He suggested deals with "already profitable restaurants and bars" that dish up ramen, soba, "and also maybe Italian".

LifeBrandz announced earlier in March, plans to buy Singapore-based Ramen Champion for as much as S$4 million. The acquisition would be financed by an interest-free, unsecured director's loan from Mr Saito.

His other strategy here is "to bring in joint ventures with already successful, famous chefs from Japan".

Mr Saito's takeover is the latest U-turn for LifeBrandz, which was founded in 2001 as a beauty and health products company. It made its debut on the mainboard three years later, before relisting on the junior board in late 2015.

LifeBrandz hit the nightclub scene in earnest in 2005, when it opened the 40,000 sq ft Ministry of Sound in Clarke Quay - but excessive haste in expanding led to the collapse of its drinks-and-dancing business.

Plagued by financial woes for the past decade, LifeBrandz seems to have had a revolving door installed in its C-suite. Mr Saito's predecessor, Mr Chng, took over in 2015 amid an employee uprising over unpaid wages.

During Mr Chng's tenure, LifeBrandz made unsuccessful bids to buy into new businesses such as nutritional supplements in Australia, garnet mining in Inner Mongolia and a gold miner in Papua New Guinea.

Mr Saito confirmed that under his leadership, the company will not return to these. Instead, he has his eye on South-east Asia's digital economy.

But he acknowledged, through his interpreter: "To support the fintech and travel business, we are doing the F&B business, from which we can expect a profit in the short term.

"Using the money we raise from the F&B business, we will invest funds to support long-term projects."

LifeBrandz most recently reported a widening second-quarter net loss of S$510,000 for the three months to Jan 31, on a revenue of S$916,000.