Japan’s biggest curry chain CoCo Ichibanya headed for sale

The owner of CoCo Ichibanya is considering a sale of Japan’s largest curry rice chain — news that sent shares of Ichibanya soaring in Tokyo.

Known for plates of thick Japanese curry over rice and customized with everything from pork cutlets to cheese, CoCo Ichibanya has almost 1,500 restaurants in Japan and globally, including locations in the U.S., U.K. and India.

Shares of operator Ichibanya jumped 16% after parent company House Foods Group confirmed it was weighing a sale. Ichibanya’s market value was ¥174.2 billion ($1.1 billion) as of Monday in Tokyo.

CoCo Ichibanya’s signature dish was first introduced to Japan by the British in the 19th century and adapted over the years into a sweeter, thicker stew served over rice. Tokuji and Naomi Munetsugu started serving curry in 1978 at their kissaten, or Japanese cafe, and later transformed the business into an international franchise.

“A change of majority shareholders will be a good opportunity for Ichibanya to enter the next phase of business growth,” said Tsutomu Yamada, analyst at Mitsubishi UFJ eSmart Securities. Ichibanya will probably attract large buyers, including private equity firms, he said, adding that if the sale proceeds, the shares could climb by another 30%.

Ichibanya and House Foods, which owns 51% of the curry company, confirmed an earlier report by the Nikkei newspaper, and are considering potential options, including privatization of the restaurant chain.

Japanese curry became a national staple thanks to its affordability, familiarity and easy customization. CoCo Ichibanya offers different spice levels and toppings, including various vegetables and fried chicken. Popular with salarymen and tourists alike, its pork katsu and seafood curries are among the biggest sellers.

Given Japanese-style curry’s global appeal, CoCo Ichibanya’s katsu curry was even recently embraced as an index to measure the purchasing power of the weak yen by Geoff Yu, a senior strategist at the Bank of New York Mellon.

“I see more potential for the unique appeal of katsu curry to reach a wider audience abroad,” Yamada said.