Coronavirus: Aji Ichiban co-founder may lower rents for vacant shops after Covid-19 losses forced once-thriving Hong Kong snack chain to shut down

Aji Ichiban has closed all 20 branches and laid off some 100 workers after suffering losses caused by the lack of tourists coming to the city
One of the vacated premises, in Causeway Bay, was leased recently for as much as 27 per cent below the market rate

Hong Kong property

Lam Ka-sing

Published: 8:30am, 9 Jun 2022

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One of the founders of Aji Ichiban said he will consider accepting lower rents for his shops, after the once-popular Hong Kong snack chain called time on its outlets in the city.

Aji Ichiban has closed all of its 20 branches and laid off some 100 workers, according to the Hong Kong Department Stores and Commercial Staff General Union, after suffering losses caused by the lack of tourists coming to the city during the Covid-19 pandemic.

Through company ownership, co-founder Tony Lai holds about 20 shops and other property units, mainly in the commercial districts of Hong Kong Island and Kowloon, according to records from Centaline Commercial.

The property holdings are “about saving up for a rainy day,” said Lai. He would “definitely” consider accepting lower rents “otherwise the market cannot accept it,” he said in a phone call.

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One of Aji Ichiban’s vacated premises, measuring about 800 square feet on Causeway Bay’s Lee Garden Road, was leased recently to another retailer for HK$130,000 (US$16,565) per month. That is 13 per cent below the asking rent and as much as 27 per cent below the market rate of HK$160,000 to HK$180,000, according to Centaline.

The company offered to lease four other shops it owned in mid-April this year, said Rickey Chan, managing director of Dorbo Realty. They are in Kwun Tong, Mong Kok, Tsuen Wan and Jordan and have asking rents of about HK$546,000 in total.

Chan said a growing number of shops had been put up for lease recently as more business operators were forced to shut down because of the tough business environment.

Aji Ichiban used to have 106 branches at its peak almost 20 years ago, according to Lai. At that time, the launch of the Individual Visit Scheme enabling mainland Chinese tourists into Hong Kong in an individual capacity rather than in tour groups boosted the snack chain’s popularity.

The mainland visitors would snap up items as souvenirs for their friends and relatives back home.

But the snack chain, which sold everything from beef jerky and shredded squid to dried apricots and chocolates, has seen business decline, Lai said.

Travel restrictions and quarantine requirements have all but killed off the city’s tourist arrivals. Just 1,800 visitors came in March, as the fifth wave of the coronavirus raged, compared with the most recent peak of 6.78 million in January 2019, a year before the pandemic began.

“It should be better after the border [with mainland China] reopens,” said Lai.

Lai said the rental income from the vacated shops could help bring in a more stable revenue stream before any decision is taken about a potential reopening of Aji Ichiban’s branches once the border reopens.

“The company’s store locations usually offer good traffic flow, and the size of the stores is not excessively large, so they are still in line with market appetite and could be easily absorbed,” said Oliver Tong, head of retail at JLL in Hong Kong

The landlords of the shops Aji Ichiban did not own “will assess the market situation and evaluate the terms in the lease contract, and a rent reduction may be possible,” he added.

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