Cavinkare gets beauty conscious, exits hotel biz

After calling it quits on their foray into hospitality segment, FMCG major CavinKare has decided to focus more the growing salon business. The company has decided to double its revenue from its beauty business in the next couple of years.

The `1200-crore Chennaibased company, which has diversified interests in personal care, food, dairy and beverages, has wound up its Vegnation brand of restaurants unable to manage it.

“We have exited from that business. I think we had too many (products) in our hands and we were not able to make any margins from it (the business). We exited about a month ago,” C.K. Ranganathan, CMD of CavinKare Ltd.

There were three fine dining Vegnation restaurants along with a casual dining CK’s Foodstaurant in Puducherry. Since inception in 2009, the company has been looking for a partner but the firm seems to have decided to stay away after burning its fingers in that business.

It is gathered that all restaurants have been sold to individual entrepreneurs.

However, the focus of the company has now shifted to the growing `7000-crore salon market in India. “We clearly see that the beauty salon market is maturing in India and the organised sector is booming and we have very aggressive plans for our beauty salon business,” Mr Ranganathan said.

The company operates two brands of salons, Green Trends and Limelite, under Trends In Vogue Pvt. Ltd.

CavinKare plans to invest `80 crore in expansion of both salon brands by increasing their base from 110 outlets to 350 by 2015 with a focus on metro and tier-II cities. “We have been expanding across markets, of which some will be company-owned, some franchisee-led,” he said. For now, the revenue contribution from beauty business is `50 crores but with expansion, this is expected to go up to `120 crore in next two years.

It also plans to tap PE funds of `350 crore through dilution of about 10 per cent stake to augment additional capacity expansion.