Lakme Lever, part of Hindustan Unilever (HUL) which runs Lakme Salons and Dermalogica India, plans to add two salons per week in the coming few years, as it grows its strength from the current 460 spread across over 150 metro and smaller cities.
The company plans to continue to hold 10% of the salons as company-owned, while the majority will be through the franchisee model. Of the current number, about 52 salons are company-owned, while the rest are on franchisee model.
Post-pandemic, Lakme Salons is also seeing an increasing number of conversions of local salons into its folds amid growing consumer preference towards branded products and services. The company currently has 22-23 such salons in its kitty.
“What we are seeing now (as a post-pandemic trend) is that a lot of people with corporate experience are wanting to be Lakme Salons partners, there are a lot more conversions of standalone salons to our brand, and also our own experts are coming forward to open or own a Lakme Salon,” Pushkaraj Shenai, CEO, Lakme Lever, told FE.
On the same store sales growth, Shenai said the company aims to maintain a “strong double-digit growth”, as business is looking up and is back to 2019 level of footfall in salons; in some geographies, salons are crossing the pre-pandemic footfall. “First year of the pandemic was harsh on the business, but with over 50-plus measures vetted by a panel of doctors, the expertise and innovation that we had adopted even in the face of the pandemic has stood us in good stead,” he said.
Shenai said while the pandemic offered great learnings, and competition from tech-enabled online platforms providing in-house beauty services, Lakme’s focus on “expertise, quality of products and diversity, along with the consumer need for escape from the drill of daily life and Me Time”, have got consumers back to the salons, and keeping it in good stead.
This is leading the company to look at further expansions. “We know 300-plus cities or towns where we can take the Lakme Salon proposition. So, there is enough scope to strengthen in the geographies that we are present in, as well as scope to go to newer geographies,” Shenai said. In terms of the revenue split, 60% comes from metro and mini metros and balance 40% from other towns.
The company is also seeing growth in the male grooming business. About 40% of salons of Lakme are now unisex salons, and a large part of this conversion happened through the pandemic years, said Shenai. “I can see that the percentage of male consumers is multiplying quite fast. It will continue to grow fast, but the base is quite small. We have had a partnership with Bombay Shaving Company to bring good quality male services in our salons, which is working well. With TG and other brands that we work with, we have got a very comprehensive portfolio of products and services for men across hair and skin,” he said.
The company has been seeing an increase in the number of grooms using its services during the wedding season, and Shenai expects “huge multiplication” in the number of grooms who come to Lakme Salons. He refrained from sharing numbers on the growth in the male grooming segment.
Lakme Salons also sees headroom for growth in its retail side of the business. At present, about 20% of the company’s revenue in salons comes from retail. “The focus on retail started only through the lockdown. We did have some amount of focus, but that was more of after care and home care to maintain the results till the customer comes back to the salon again. However, increasingly post the lockdown, consumers understand what is a better quality product, what is better delivery and science, and they are willing to pay a premium for it. With this tailwind, we have been able to drive retail business well,” he said.
Lakme is now giving more space and higher visibility to its retail spaces within the same salon format. “We have created specific post care, home care consultation modules and strengthened the portfolio of offerings also,” Shenai said.