Yo! Sushi puts Middle East expansion plans on hold

Plans to expand Yo! Sushi in the Middle East have stalled.

Managing director Robin Rowland said: "Middle Eastern companies are in stalemate and are putting off any decisions until the smoke clears."

The London-based group, which specialises in sushi served on a conveyor belt, signed an agreement with the Kuwait Hotels Company in June this year to open three restaurants in Kuwait.

Under the agreement, the franchisee, a hotel operator and contract caterer partly owned by the Kuwaiti government, would develop the first restaurant by the end of 2002.

The site overlooks the Gulf just outside Kuwait City and would cost $2m (£1.38m). But the Kuwait Hotels Company has still to find a franchiser for a proposed coffee bar in the building.

Rowland said that the freeze on Middle Eastern developments had no impact on Yo! Sushi's core business which had been "relatively unscathed" by recent events. In the two weeks following 11 September, turnover was down by 10% and was currently down by 5%.

But he added: "If this level of sales continues, we'll have to take down costs - trim overheads and stretch our workforce, asking them to work a few extra hours a week."

Two head office employees - one in marketing and one in international development - have been made redundant.

The 12th Yo! Sushi restaurant opens on the concourse of London's Paddington Station on 24 October. The stand-alone site took one week to build from scratch and cost £180,000. A further five are planned over the next 12 months.