Fine Dining Restaurant, Open
Facing Financial Trouble Due to Real Estate Investment
Declining Popularity of the Industry
Open, South Korea’s largest fine dining restaurant company operating Tokyo Sirloin, Ilpan, Aria, and others, is on the brink of collapse. For the past three months, the company has been unable to pay its employees and food suppliers, leading to a series of restaurant closures.
According to a recent report by The Korea Economy, Open, a leading fine dining company in Korea, has fallen into financial trouble due to excessive real estate investment in a sluggish business environment.
In 2021, Open decided to build a Select Dining Shop Opening The Cheongdam, in Cheongdam-dong, Gangnam-gu, Seoul, promising to “focus on discovering and nurturing excellent chef talent.” The establishment of the dining shop, which was scheduled to be completed in June of last year, was delayed by a year and has now been completed, costing hundreds of billions of won.
The slowdown in domestic consumption during the construction period and the corresponding increase in overseas travel also negatively affected the fine dining industry. The younger generation, who enjoy high-end gourmet culture, have shifted overseas. Industry insiders claim that Open began construction in a state of cash shortage.
Open also faced allegations regarding food ingredient management. In May, Myeongbo-dang, operated by Open, was accused of not using white truffle and caviar in reality but not correctly informing customers of this fact.
At the time, CEO Hong explained, “We changed the caviar product to Abruga because the cost of the caviar imported by a blogger from Animato did not match, but we used the same can for showing,” apologizing, “We pretended to be honest, but we weren’t. I’m ashamed and will take care of it better.”
As a result, Open had to close a series of restaurants. It is reported that from September, the company could not pay its employees, causing about 300 out of 700 employees to leave the company.
The management hastily put the company on the M&A market, but the sale process is reportedly not going smoothly.
Netizens who heard the news expressed various opinions, such as “Building a building in Cheongdam-dong, an expensive neighborhood, seems to be the root cause of all this, regardless of the downturn in consumption,” “It seems like personal bankruptcy will soon follow,” “This may be a natural result because the company did not focus on its main business, which is one of the risks companies face,” and “Ordinary people can’t make money, so who will go to fine dining?”
By. Heo Jae Woo
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