<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>April 9, 2009
CUTTING COSTS, SAVING JOBS
</TR><!-- headline one : start --><TR>Layoffs not an option for sushi chain boss
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Yang Huiwen
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
</TD><TD vAlign=bottom>
Like a family, (clockwise from left) operations director Lena Teo, service quality manager Lynette Lai, Apex-Pal CEO Douglas Foo, assistant area manager Grace Look and marketing executive Candice Johanis of Sakae Sushi will ride out the bad times together. -- ST PHOTO: TERENCE TAN
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->SAKAE Sushi restaurant chain founder Douglas Foo recoiled in dismay at the notion that he would retrench his own staff to cut costs during these tough times.
'Most people work for a livelihood. That becomes a huge responsibility you have to consider,' said Mr Foo, 39.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Slashing costs
Top executives have taken a pay cut of 25 per cent
Salaries of middle management staff cut by 20 per cent
</TD></TR></TBODY></TABLE>'I'm responsible for more than 1,000 people, who are in turn responsible for more people at home. They have to put food on the table for their family.'
He told The Straits Times that his staff were like a family to him, and that retrenchment was not an option.
Instead, Mr Foo - chief executive of Apex-Pal International, which owns and operates the chain of Japanese restaurants - took the axe to his own pay packet and those of other senior staff.
He has taken a 25 per cent wage cut, along with two other top executives, while over a dozen middle management staff have had their pay slashed by 20 per cent.
The decision was tough but necessary.
The Jobs Credit scheme unveiled at the last Budget is helping to mitigate about $80,000 of the company's monthly wages bill of about $2 million.
The salary cut, implemented a month ago, was a pre-emptive move to prevent further drastic measures if things get worse later, said Mr Foo.
The company is also looking to freeze wages for its remaining employees.
'We've never done it before,' said Mr Foo of the salary cuts - even after the company opened its first Sakae Sushi outlet in OUB Centre in 1997 at the height of the Asian financial crisis.
'But we're worried about the path ahead of us. We don't want the ship to sink. At least the next one to two years, it's not going to be an easy ride.'
Mr Foo mulled over the pay cuts for six months before acting. The company sank into the red last year for the first time since it was listed on the Singapore Exchange in 2003.
It reported a net loss of $3.8 million for the 12 months ended Dec 31, as compared to a profit $2.3 million in 2007, mainly due to rising food, rental and salary costs. It was also hit by operating losses at overseas units and impairment losses from closed or restructured business.
Last November, it shut down one of two Sakae Sushi outlets in New York City, barely a year after opening, due to the ailing United States economy.
Rental is another bugbear as landlords are still considering increasing rents even though times are bad, he said.
'We've yet to see the full impact, but we can't implement these measures only when things really start getting bad,' he said, adding that he had looked to some of Singapore's stalwart companies which were also reviewing their cost structures.
Mr Foo, a father of four young boys, is a very family-oriented man, and regards himself as head of the Apex-Pal 'family'.
His concern for his staff was confirmed by employees. When Ms Grace Look, an assistant area manager, joined the company eight years ago, she was 'shocked to see Douglas in the outlet helping to serve customers and clearing tables, just like one of us'.
'We're all treated like family,' she said. 'In fact, we were all prepared for a much worse scenario. When we were told that there may be just a wage freeze and no one would be let go, everyone was pleasantly surprised and very grateful.'
'The company culture values us employees,' said Ms Lena Teo, 40, an operations director who has been with the company from the start. She said the bonding among staff and the family-like environment help to motivate her at work.
Cost-saving measures extend beyond the pay cuts.
Restaurant staff help to cut food wastage by reducing the food put out on its conveyor belts. They prepare them only when customers order, said Ms Look.
Executives, who used to travel once every six weeks to check on overseas outlets, do audits and conduct training, now try to combine such tasks in one trip, to cut travelling to once every three months.
The group is seizing the opportunity during the slump to improve productivity. For example, staff are deployed to branches where they are most needed depending on customer traffic. This reduces the need for overtime. 'The past few years we've been expanding at breakneck speed,' said Mr Foo. 'It's a good time to relook our operations and improve on efficiency and beef up staff training.'
Over a dozen staff have been sent for re-training under the government-funded Skills Programme for Upgrading and Resilience. The firm is working out a schedule so that it can send more people.
The group is also proceeding 'cautiously' with its expansion in the current economic climate. During the boom years of 2006 and 2007, it added two new outlets a month. The pace of expansion has slowed considerably to one every two months over the past six months.
For example, it is being more picky in the choice of location and rental for an outlet. If expectations are not met, it is very willing to let the opportunity go.
The firm expects to open two more outlets, one in Orchard Central and another in Northpoint, over the next few months.
Escalating food and energy prices last year had taught the company valuable lessons when it comes to cost management.
The company also liaises directly with quality suppliers and farmers who can provide raw materials in bulk straight from the farm. It also works with importers to try to manage the price of rice, which is a staple of its sushi business. Despite the cost-cutting moves, Mr Foo said there is no compromise on food safety. Food samples are still sent for laboratory testing every week.
CUTTING COSTS, SAVING JOBS
</TR><!-- headline one : start --><TR>Layoffs not an option for sushi chain boss
</TR><!-- headline one : end --><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Yang Huiwen
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Like a family, (clockwise from left) operations director Lena Teo, service quality manager Lynette Lai, Apex-Pal CEO Douglas Foo, assistant area manager Grace Look and marketing executive Candice Johanis of Sakae Sushi will ride out the bad times together. -- ST PHOTO: TERENCE TAN
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->SAKAE Sushi restaurant chain founder Douglas Foo recoiled in dismay at the notion that he would retrench his own staff to cut costs during these tough times.
'Most people work for a livelihood. That becomes a huge responsibility you have to consider,' said Mr Foo, 39.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Slashing costs
Top executives have taken a pay cut of 25 per cent
Salaries of middle management staff cut by 20 per cent
</TD></TR></TBODY></TABLE>'I'm responsible for more than 1,000 people, who are in turn responsible for more people at home. They have to put food on the table for their family.'
He told The Straits Times that his staff were like a family to him, and that retrenchment was not an option.
Instead, Mr Foo - chief executive of Apex-Pal International, which owns and operates the chain of Japanese restaurants - took the axe to his own pay packet and those of other senior staff.
He has taken a 25 per cent wage cut, along with two other top executives, while over a dozen middle management staff have had their pay slashed by 20 per cent.
The decision was tough but necessary.
The Jobs Credit scheme unveiled at the last Budget is helping to mitigate about $80,000 of the company's monthly wages bill of about $2 million.
The salary cut, implemented a month ago, was a pre-emptive move to prevent further drastic measures if things get worse later, said Mr Foo.
The company is also looking to freeze wages for its remaining employees.
'We've never done it before,' said Mr Foo of the salary cuts - even after the company opened its first Sakae Sushi outlet in OUB Centre in 1997 at the height of the Asian financial crisis.
'But we're worried about the path ahead of us. We don't want the ship to sink. At least the next one to two years, it's not going to be an easy ride.'
Mr Foo mulled over the pay cuts for six months before acting. The company sank into the red last year for the first time since it was listed on the Singapore Exchange in 2003.
It reported a net loss of $3.8 million for the 12 months ended Dec 31, as compared to a profit $2.3 million in 2007, mainly due to rising food, rental and salary costs. It was also hit by operating losses at overseas units and impairment losses from closed or restructured business.
Last November, it shut down one of two Sakae Sushi outlets in New York City, barely a year after opening, due to the ailing United States economy.
Rental is another bugbear as landlords are still considering increasing rents even though times are bad, he said.
'We've yet to see the full impact, but we can't implement these measures only when things really start getting bad,' he said, adding that he had looked to some of Singapore's stalwart companies which were also reviewing their cost structures.
Mr Foo, a father of four young boys, is a very family-oriented man, and regards himself as head of the Apex-Pal 'family'.
His concern for his staff was confirmed by employees. When Ms Grace Look, an assistant area manager, joined the company eight years ago, she was 'shocked to see Douglas in the outlet helping to serve customers and clearing tables, just like one of us'.
'We're all treated like family,' she said. 'In fact, we were all prepared for a much worse scenario. When we were told that there may be just a wage freeze and no one would be let go, everyone was pleasantly surprised and very grateful.'
'The company culture values us employees,' said Ms Lena Teo, 40, an operations director who has been with the company from the start. She said the bonding among staff and the family-like environment help to motivate her at work.
Cost-saving measures extend beyond the pay cuts.
Restaurant staff help to cut food wastage by reducing the food put out on its conveyor belts. They prepare them only when customers order, said Ms Look.
Executives, who used to travel once every six weeks to check on overseas outlets, do audits and conduct training, now try to combine such tasks in one trip, to cut travelling to once every three months.
The group is seizing the opportunity during the slump to improve productivity. For example, staff are deployed to branches where they are most needed depending on customer traffic. This reduces the need for overtime. 'The past few years we've been expanding at breakneck speed,' said Mr Foo. 'It's a good time to relook our operations and improve on efficiency and beef up staff training.'
Over a dozen staff have been sent for re-training under the government-funded Skills Programme for Upgrading and Resilience. The firm is working out a schedule so that it can send more people.
The group is also proceeding 'cautiously' with its expansion in the current economic climate. During the boom years of 2006 and 2007, it added two new outlets a month. The pace of expansion has slowed considerably to one every two months over the past six months.
For example, it is being more picky in the choice of location and rental for an outlet. If expectations are not met, it is very willing to let the opportunity go.
The firm expects to open two more outlets, one in Orchard Central and another in Northpoint, over the next few months.
Escalating food and energy prices last year had taught the company valuable lessons when it comes to cost management.
The company also liaises directly with quality suppliers and farmers who can provide raw materials in bulk straight from the farm. It also works with importers to try to manage the price of rice, which is a staple of its sushi business. Despite the cost-cutting moves, Mr Foo said there is no compromise on food safety. Food samples are still sent for laboratory testing every week.
