Just a little over six months after opening its doors, Japanese izakaya Katsu Detroit is preparing to serve its last meal. The Woodbridge restaurant is set to close on Sunday, June 30 and is advertising a 20 percent-off sale on food during its final week of business.
Joshua Chiatovich, a minority partner in the Japanese pub, confirmed the closure on Tuesday evening on social media. He tells Eater today that since before the opening, Katsu Detroit had a significant cash flow issue that was exacerbated by a costly opening process.
Chiatovich partnered with majority owners and restaurateurs Roy Chen and Katsu Yama — founder of several Katsu izakayas throughout Asia — to bring a Japanese izakaya to Detroit. Both majority partners were based in Asia, while Chiatovich managed on the ground operations in Michigan. “No loans were taken out to start this business,” he says, and “it took a lot more money to open the business than we first thought it was going to take.”
Despite being extremely busy after the initial opening in December, Chiatovich says the restaurant was running at a deficit. “We lost so much money just in the first couple months, just because, quite frankly, my business partners are very successful in Asia, but the American market was very new to them — so the understanding of food costs, the understanding of employee costs, the understanding of the American market in general,” he says. As the buzz died down and business leveled off, the restaurant hemorrhaged even more funds.
Katsu was designed as a cultural experience as much as a restaurant. With its entrance down a narrow alley, it was meant to feel like a spot someone might stumble upon by accident on the streets of Tokyo. Inside the restaurant had a tatami-inspired seating area with tables nearly at floor-level; guests were asked to take off their shoes. However, Chiatovich believes some of the hidden gem qualities Katsu started working against the business. The restaurant to this day lacks signage at the front of the building and had virtually no online presence beyond a rarely updated Instagram account.
Chen, who lives in China, began discussing the possibility of closing down several months in. “It came down to: Does Roy move to Detroit and really focus on this to make it successful or does he cut his losses now without having to lose further investment?,” Chiatovich says. Chen eventually made the decision to close the business. Staff were informed a week ago about the closing.
While the restaurant ultimately wasn’t successful due to operational issues, Chiatovich says that a Japanese izakaya in the spirit of Katsu could definitely be a viable business in the city of Detroit. “I 100 percent believe that Detroit can sustain this style of restaurant and I believe that Detroit is hungry for this kind of multicultural thing,” he says. “Katsu Detroit was a Katsu Detroit problem, not a city of Detroit problem.”