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Jawed Habib Hair and Beauty Ltd plans to enter the hair care products segment under its private label to shore up profitability.
The products would be launched by the end of June, said Mr Jawed Habib, Chairman and Managing Director.
The company currently provides hair and beauty care services through its salons spread across the country.
According to Mr Rohit Arora, Executive Director, the margins from sale of products would be almost triple of what comes from services, which currently stands at about 7-10 per cent.
“Salons like Lakmé and L'Oreal have moved from products to services. We will have the advantage of transitioning from services to product,” Mr Arora said at a press meet to share the company's expansion plans here on Thursday.
The company plans to launch 20 products in the hair care segment ranging from shampoos, serums, hair conditioners, hair oils, spa and henna. “We have been working on this project for the last one year; we are now ready to formally launch them in the market. These products will be exclusively sold through our outlets,” Mr Habib said.
Revenues from sale of products are likely to account for nearly half of the company's total operational income over the next three years, he added. The company saw revenues of Rs 50 crore in 2010-11 and expects to grow by 15 per cent in the last financial year. The total market for domestic hair and beauty sector stands at aboutRs 9,000 crore and is growing at around 35 per cent on a year-on-year basis.
The size of the industry is likely to grow to Rs 28,400 crore by 2015, Mr Arora said.
Expansion plans
Jawed Habib plans to set up 5,000 salons in the country in the next five years. The company, which currently has 312 salons, is opening on an average eight salons a month, Mr Arora said. All its salons are set up on a franchisee model.
Jawed Habib has recently opened a salon in Singapore through the franchisee route. The company also plans to set up three flagship salons in the UK by the end of this year.
“Our focus will be on the domestic market as the potential is huge and a major share (80 per cent) of the market is still dominated by unorganised sector. We will then gradually focus on international markets as well,” Mr Arora said.
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