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Lakme Lever to open 300 stores in three years

MUMBAI: Lakme Lever, the specialized skin and hair care services from the consumer goods giant Hindustan Lever, today said it will add over 300 stores in the next three years to take the total to 520.

"This year, we have added 50 salons, which is one store a week, and for the next three years, we will double the count. Every year we will add two salons every week, so that is roughly about 100 salons. It will be in the region of 520 stores over the three years,"
Lakme Lever Chief Executive Pushkaraj Shennai told reporters here.

The company operates 200 stores at present. "Half of our stores are in the metros and the balance is in small towns. We are represented well across the population strata in urban areas and that is what we are looking at when we expand," he added.

The company operates mostly through the franchise model. "We are today 200 salons across. We are present across 50 cities. We have a significant presence in the franchisee model, so 75 per cent of our salons are franchisee-owned and the rest company-owned. Growth will come from both the streams. Many of our franchisees own multiple salons. About 80 franchisees out of the 135 salons are dual-owned," he added.

He did not divulge the investment details of the company but said: "For the franchise model, depending on the size, investment varies from Rs 35-40 lakh. The cash operating break-even happens anywhere between six to eight months and the capital is recovered in around four years."

Explaining the formats that the company operates in, he said: "We have three formats--Lakme Salons & Studios, which is our main premium format; at the top-end we have Lakme Absolute and we do have a unisex format, but we are not scaling that up, that operates only in clubs. It is called Lakme Ivana."

He further said close to 20-25 per cent of the turnover comes from the bridal services.

"The bridal and associated segments, depending on the region, is 20-25 per cent of the turnover. Obviously it grows at a good pace but the base is also very high. Lakme has been very strong in the bridal segment," he added.

When asked if it plans to open men's salons, Shennai replied in the negative. "Lakme has a very unique offering. We are very strong in skin care and we are dialing up our strength in hair care.

"This whole positioning is only for women at Lakme Salons and we will not dilute that. Our top-end brand Lakme Absolute salons are in Delhi's South Extension and Bangalore. We are launching the Mumbai salon very soon and will be open to both men and women."