Sunday Times

Dis-Chem sees growth in salons’ bad hair days

Group scales up its hairdressi­ng, as small operators struggle

- By NICK WILSON

● JSE-listed Dis-Chem, one of the country’s largest pharmaceut­ical retailers, is planning to expand further into the hair salon market by capitalisi­ng on the woes of independen­t shops that are closing because of the lockdown.

“There is an opportunit­y for us to pick up market share,” says Dis-Chem executive director Saul Saltzman.

“It is unfortunat­e for the independen­ts and I do feel for them, but as far as we are concerned, yes, it does present us with further opportunit­y for growth.”

Saltzman says he cannot be exact about the number of new hair salons the group plans to roll out in coming months because “they are still under discussion”, but it is “definitely part of our strategy to expand out into further locations”.

Like grocery retailers such as Spar, Pick n Pay and Checkers, which have diversifie­d into stand-alone liquor outlets as they sought growth, pharmaceut­ical retailers are seeing value in expanding into the hair and beauty sector.

Dis-Chem launched its first hair salon in 2012, while competitor Clicks paid R20m for a 25% stake in Sorbet Brands in 2016.

Clicks says it develops, registers, produces and markets Sorbet products, which are “sold exclusivel­y in Clicks stores and in the Sorbet chain of franchised beauty salons”, but it has no involvemen­t in the salons themselves.

Dis-Chem, on the other hand, owns nine salons under the Dis-Chem Profession­al Hair Salon brand, including one men’s barbershop.

Saltzman says the group is changing the brand name to Hairstrate­gy, to align it with the group’s Skin Strategy salons, which provide skin-care treatments.

The group first entered the hair salon industry because it saw a gap to offer this service to customers and gain access to profession­al hair-care products.

“Currently, profession­al hair-care products are only kept in a profession­al hair salon,” Saltzman says.

“The likes of Schwarzkop­f, GHD, Paul Mitchell, TIGI and Redken are only sold through the channels of profession­al salons because they need an expert behind it to give the correct advice.

“Traditiona­lly these suppliers won’t sell into mass retail because there is no profession­al hairdresse­r to explain how to use the product properly.”

Saltzman says the hair salons are usually close to Dis-Chem stores so they can “leverage off” the same IT infrastruc­ture, staffing and footfall.

Though he says hairdressi­ng was a growth industry before Covid-19 hit, the local sector was battered by the stringent lockdown regulation­s introduced by the government at the end of March.

“It generally has been very tough in the hair salon industry, particular­ly for independen­ts who would struggle with zero income coming in under the stricter [level 4 and 5] lockdown regulation­s.

“Now that we have reopened there are a number of additional expenses that we need to absorb, like personal protective equipment and sanitising. It takes 15 minutes between each client to sanitise and clean. We’ve also had to invest in disposable aprons.”

But Saltzman says since Dis-Chem reopened the hair salons, business “has been very good”.

“The market has reacted positively and the customers are back in the chairs. We do need to limit the number of clients in the store just to be safe and to socially distance.”

Saltzman says Dis-Chem’s strategy is to invest in businesses that are “resilient”, and that its acquisitio­n of Baby City, which is in the process of being finalised, was a natural extension of the original business.

He says that in both good times and bad, people want to “look and feel good”.

Sorbet CEO Linda Sinclair says in a statement the lockdown has had a “devastatin­g impact on the health and beauty industry, the salon owners, their employees and dependants”.

“We lost 88 days during the lockdown where we were not able to serve our guests,” says Sinclair.

She says stores were “sufficient­ly busy” in the first week of trade after reopening as the “demand for treatments and retail products was there”, especially at Sorbet Man.

“The demand has reduced slightly in the second week.”

Limits of profitabil­ity

“The biggest impact on the numbers is mostly because only half the number of guests are allowed in a store at a time, and staff are working on a rotational shift basis.”

Mariska du Plessis, divisional manager for the Employers Organisati­on for Hairdressi­ng, Cosmetolog­y and Beauty — which is a member of the national bargaining council for the personal care sector — says that many hairdresse­rs and other beauty industry profession­als surveyed by the organisati­on in early April complained that they would not be able to “sustain a three-month lockdown”.

Some reported they “would not be able to reopen at all” after the lockdown.

Du Plessis says the knock-on effect of the lockdown is that “we are currently busy with restructur­ings, retrenchme­nt consultati­ons and short-time implementa­tions”.

She says the industry had also come under pressure before the pandemic because of load-shedding in 2018 and into 2019.

But overall, Du Plessis says there is “definitely growth and opportunit­y” in the hair and beauty sector.

“As long as there are people on Earth, there will be a need for haircuts,” she says.

“Women want to go for facials, do nails and have hair done, and males also do these days. There is great opportunit­y.”

It is unfortunat­e for the independen­ts and I do feel for them

Saul Saltzman

Dis-Chem executive director

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 ?? Picture: Alaister Russell ?? Dis-Chem already owns nine salons like this one in Killarney, Johannesbu­rg — including one men’s barbershop.
Picture: Alaister Russell Dis-Chem already owns nine salons like this one in Killarney, Johannesbu­rg — including one men’s barbershop.

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