By Angela Chen
Shake Shack Inc., fresh off a successful initial public offering
last month, will add to its expansion efforts by opening its first
restaurant in Tokyo next year and building nine more in Japan by
2020.
The company has joined with with Sazaby League Ltd., which
helped Starbucks Inc. expand in Japan.
Shake Shack, a New York-based "fast casual" restaurant known for
its burgers and crinkle-cut fries, unveiled plans to expand beyond
its existing 36 restaurants stateside and 27 international
locations when it filed to go public late last year. According to
its regulatory filing, the company plans to build 450 Shake Shacks
in the U.S. by adding 10 new ones each year domestically and will
license additional restaurants abroad "opportunistically."
Shares of Shake Shack more than doubled last month in their
market debut, indicating the appetite that investors have in these
fast-casual restaurants. Investors and analysts said the appeal of
Shake Shack's shares lie mainly in the chain's growth prospects.
Shares of so-called fast-casual restaurants have been gobbled up by
investors in recent IPOs, in part on a bet that consumers will be
spending more money eating out as falling gas prices leaves more
money in consumers' pockets after filling up their car's gas
tanks.
Shake Shack's stock opened at $47.21, well above its initial
public offering price of $21, which had valued the chain at $745.5
million. They quickly hit a high of $52.50 before retreating. The
shares, which trade on the New York Stock Exchange under the symbol
"SHAK," ended their first day at $45.90.
The chain has been profitable since at least 2012 and reported
$3.5 million in profits for the 39 weeks ended Sept. 24.
Write to Angela Chen at angela.chen@dowjones.com
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