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Proctor & Gamble plans to extend its funding agreement with Jawed Habib Hair and Beauty salons beyond the UK to new markets such as Dubai and Singapore. To begin with, the FMCG major has earmarked a loan amount of £10,000 for each Jawed Habib-owned salon in the UK.
Rohit Arora, Executive Director and CEO, Jawed Habib Hair and Beauty, said, “Today, P&G has signed an agreement to provide a loan of £10,000 (about Rs 9 lakh) for every salon that we open in the UK. A similar agreement is expected to follow in Dubai and Singapore.”
Jawed Habib already has a single salon under the JH Bevels brand in London. Its next set of five salons will get funded by P&G, as the salon chain plans to launch 50 stores in the next two years.
In India, Jawed Habib already has an exclusive tie-up with P&G’s Wella brand. However, the FMCG company is not in a position to fund Jawed Habib salons in India, as it has to take permission to operate as an NBFC (non banking financial intermediary) to do so.
As Arora says, “In the overseas markets such as the UK, FMCG companies such as P&G have the freedom to give soft loans to entrepreneurs, but in India it is not allowed as it does not operate as a NBFC.”
Meanwhile, in the Indian market, Jawed Habib plans to raise funds through debt and equity, having floundered in the IPO (initial public offering) market in the recent past. “Today, we are opening 30 salons a month and may try and go back to having an IPO when market conditions are better,” said Jawed Habib, Chairman and MD.
The company is raising money through debt and equity for extending its salons into its latest high end luxury format – JH Bevels. For the first time, it has also decided to have company-owned outlets instead of franchises for the JH Bevels format, which will lead to better margins and also help raise funds in the future.
The luxury format has been floated as a separate subsidiary to the parent company Jawed Habib Hair and Beauty. “The company-owned outlets under JH Bevels will exist under a separate subsidiary. When raising money through the public route, investors prefer to have company-owned outlets,” said Habib.
The salon company is also looking at getting back at airports with its ‘Xpresso’ format. “We hope to be present soon at Delhi’s T3 airport and our salons this time will be beyond the check-in area. There would be quick clipper cuts and blow dry facilities to help passengers look presentable before they fly out for meetings,” Habib added.
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