It is in final stages to enter into a joint venture by acquiring about 49% stake in Groom India Salons & Spa, the company which runs Naturals Salon & Spa, said executives aware of the development.
“They have around 700 outlets across India and Reliance wants to grow it four-five times,” said one of the executives, who spoke on condition of anonymity. “However, the existing promoters could continue running its operations and Reliance’s funding will help network expansion.”
The ₹20,000 crore salon industry in India has about 6.5 million players comprising beauty parlours and barber shops. It was among the worst hit segments during the Covid-19 pandemic, during which Grooms India Salon & Spa CEO had requested the government for financial aid on social media to keep the two-decades-old business afloat.
“The talks are at a nascent stage. Covid impacted every business and salon was probably the worst impacted. But in the last seven months, business has been robust and Covid is not the reason why we are diluting stake,” said CK Kumaravel, CEO, Naturals Salon & Spa.
A Reliance Retail spokesperson said, “As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges.”
Over the past two years, salon chains such as Enrich Salon, Kapils Salon, YLG, Juice Salons, Bodycraft Salon & Spa, Truefitt & Hill and Jean-Claude Biguine have transitioned into beauty products retailers to offset the impact on their service business during the pandemic. Reliance Retail will also leverage the chain to offer experiential sales and distribution points for its beauty products as it plans a new standalone beauty business, said executives.
Reliance Retail also plans to open standalone stores for beauty products. Last quarter, it acquired a majority stake in Mayuri Kumkum, the company that owns and operates Insight Cosmetics.
“Salon segment has a lot of potential and Reliance is entering the segment at a right time. Most salons run on a franchise model and this space could see more such strategic acquisitions by bigger organised companies, apart from attracting financial investors,” said Gaurav Marya, chairman, Franchise India.