As can be seen, difficulties made NovaGroup forced to focus mainly on its core business of real estate and forced to let go of the F&B field. Photo: Quy Hoa
Many customers were surprised to see the coffee shops of Nova system in the central area of Ho Chi Minh City announced to close. After that, a series of restaurants, retail stores, etc., despite being crowded with customers, also made a similar announcement before NovaGroup completed selling Nova F&B segment to its Singapore partner.
Nova F&B withdraws
According to information shared by Nova F&B, this activity took place at a time when NovaGroup was restructured to focus on core areas. “The closure of some stores is not completely effective for the purpose of optimizing business efficiency, adjusting and changing in terms of strategy of Nova Service,” NovaGroup’s statement stated.
As can be seen, difficulties made NovaGroup forced to focus mainly on its core business of real estate and forced to let go of the F&B field. Previously, Nova F&B was established in mid-2015, belonging to Nova Service Corporation.
Nova F&B used to be one of the business areas that NovaGroup expected to develop to supplement its main activity, which is real estate. In fact, this business segment also brought profits after only a short time of operation.
The estimated revenue of this company is nearly VND17 billion and more than 8 times higher to approximately VND140 billion after only 1 year, then surpassing VND200 billion in 2021 despite the impact of the COVID-19 pandemic.
Along with revenue, operating efficiency also increased strongly over the years thanks to the improvement of gross profit margin. From 34% in 2019, by 2021, Nova F&B’s gross profit margin will reach more than 65%. This number is even slightly higher than Golden Gate, the largest restaurant chain currently, with a gross profit margin of around 58-61%.
VinaCapital has successfully tied the acquisition of Nova F&B by a Singaporean partner. Accordingly, this unit will sign an operation agreement with IN Hospitality and change its name to IN Dining.
Under the new owner’s takeover, the fate of Nova F&B’s brand systems is unknown. But the unit directly involved in the operation has many years of experience in the industry. Because, IN Hospitality is the operator of a number of large conference, event and wedding centers in Ho Chi Minh City such as GEM Center, White Palace Hoang Van Thu, White Palace Pham Van Dong, The Log restaurant, W Gourmet. Regarding the business situation, IN Hospitality recorded a sudden profit after tax in 2022 with VND130 billion, an increase of nearly 11 times in 2021 (VND11.9 billion VND).
IN Dining challenges Golden Gate
In Hospitality was formerly known as PQC Convention Joint Stock Company, a member unit and also the core field of the IN Holdings “ecosystem” of twin entrepreneurs Nguyen Huu Phu and Nguyen Huu Quy. These two entrepreneurs have many years of experience in the restaurant, wedding, and hotel business.
Mr. Andy Ho, General Director of Investment Council of VinaCapital Fund Management Company, said that VinaCapital is currently a shareholder of IN Holdings and has accompanied the business for the past 4 years.
According to Mr. Andy Ho, IN Dining is more targeted towards customers in the high-end segment. “VinaCapital, as a strategic shareholder, fully supports and continues to support businesses in strategy and capital so that they have enough resources to operate and expand the chain of food and beverage restaurants under IN Dining,” he said.
Meanwhile, the F&B sector in Vietnam is still considered to have a lot of growth potential and has recovered quickly since the pandemic. Statistics of iPOS.vn show that the Vietnamese F&B market has accelerated significantly after the COVID-19 epidemic. By the end of 2022, the country has about 338,600 restaurants and cafes with an annual growth rate of 2% in the 2016-2022 period. This unit estimates the size of the F&B market in 2023 will increase by 18% compared to 2022, reaching VND 720,000 billion. After an impressive recovery and growth, the F&B industry will continue to develop at a stable rate and is expected to reach a value of VND 938,300 billion by 2026.
Golden Gate (owner of Vuvuzela, Kichi-Kichi, Sumo, GoGi chains…) has grown rapidly after COVID-19. In 2022, Golden Gate reached its peak of profit with VND659 billion, while the same period last year lost VND431 billion. The profit figure of this F&B unit in 2022 is even twice the pre-epidemic profit.
In fact, Nova F&B is just a rookie in the market, while Golden Gate has had many years of fighting. Currently, in the field of restaurant chains, Golden Gate is leading in terms of coverage, store size, and revenue.
If Golden Gate focuses on mid-end brands, Nova F&B targets the more high-end segment. After acquiring Nova F&B, IN Dining will have to accelerate to compete with Golden Gate’s chain system. Notably, according to Mr. Vu Thanh Hung, CEO of iPOS.vn, restaurants in the premium segment (Premium F&B) are on the rise. This model not only caters to high-end customers but also caters to near-premium customers on special occasions.
It must also be added that Golden Gate is also in the process of internal restructuring, streamlining the management apparatus. After 18 years of establishment, this company also changed its name to Golden Gate Group Joint Stock Company and brand identity logo.
With this innovation, Mr. Dao The Vinh, General Director of Golden Gate, emphasized the strategy of “bringing Vietnamese cuisine to the world and bringing international culinary models to Vietnam”. Previously, in November 2022, the Board of Directors of the Company announced an overseas investment by establishing an overseas company with an investment capital of more than 4 million USD. Business purpose is consulting, franchising, restaurant operation, and food distribution.
As of the end of December 2022, the Golden Gate system owns 22 brands with nearly 400 restaurants in more than 40 provinces and cities. The boom of Golden Gate and Nova F&B’s move under the new name IN Dining signal that the upcoming F&B market still has many new waves.
