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CavinKare to expand branded salons biz

06-August-2004
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CavinKare to expand branded salons biz

Having fine-tuned its business model, Trends-In-Vogue Pvt Ltd, a group company of FMCG company CavinKare Pvt Ltd, is planning a quick expansion of its branded salons business. The end of this financial year will see the opening of five Limelite's, its premium salon and spa, and the establishment of 15 more Green Trends, its mid-priced family salon.

Mr S. Jagdish, Head, Retail, CavinKare, told Business Line that all this expansion will be in the South. Two more Limelite's will be added to the existing one in Chennai, while it plans two in Bangalore. That apart, Trends is looking at setting up six more Green Trend salons in Chennai while the rest will spring up in Bangalore, Hyderabad and Coimbatore. The investment tab for this expansion will be approximately Rs 4 crore, which will be funded entirely by CavinKare. Each of these salons could hit cash breakeven in four months from start, he said. At a later stage, the company could look at raising some debt to fund further expansion programmes, said Mr Jagdish.

A few factors played a role in encouraging the company to go in for a quick expansion. One is the setting up of its in-house academy to train people in hair and skincare. Currently, 80 people are being trained in a four-month programme, which will shortly be a paid one, but which will guarantee a job at the end of it. Secondly, Trends has understood the business of running salons and coming up with offers which increases "recoveries from customers". "Earlier, men used to come in only for basic grooming, perhaps a hair cut and dyeing, but now they're walking in for all kinds of services - from hair colouring to pedicures," said Mr Jagdish. The growing market for personal wellness has also had a positive impact on the grooming industry.

Rolling out some statistics, Mr Jagdish says that earlier where the "average recovery" from a male customer would be Rs 80-90, it has gone up by 35 per cent, meaning a male customer is now willing to avail himself of more services at a salon. Also, while earlier male contribution to revenues of a salon was 40 per cent, 55 per cent women and the rest kids, the contribution is today almost equal for men and women, he said. Also, a salon looks at the average occupancy for a chair - that has risen to almost 50 per cent from 30-35 per cent.

The first Limelite's in Chennai has undergone a makeover with a new logo and new identity and a new unisex area where both sexes can avail of services in the same area. Increasingly, said Mr Jagdish, especially among the expatriates who visit the salon, a couple want to be together when availing of a service, be it a facial or a hair-do.

Trends is also in the process of developing its own range of brands in hair, skin and body care which will be sold through its salons for its patrons.

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