“Recovery is slower than what we thought. In terms of expansion, we had quite aggressive plans to grow to become a bigger format (player), get more products, more on and offline. Of that, at least adding new stores is currently on hold,” Enrich Salon founder Vikram Bhatt told .
In the past two years, the company has been adding almost 20-plus stores every year, he said adding that “I don’t think we will be adding any more stores at least till March, till we get back on track”.
Stressing that this will be a year of consolidation with focus on both offline and online, Bhatt said, “We are going to ensure that we first get back on track. In fact, we have shut down four stores…we are also into the second phase of evaluation. We will be shutting down another three to four stores. So, from 86 stores to 78 is what we feel we would end the year.”
He added that the closure of the stores is primarily for the reason that centres are not affordable. Even though some of the owners are ready to give consideration, it is not good enough and the business does not look feasible at the store level, Bhatt said.
When asked about the expected impact on revenue due to the pandemic, he said, “This year, we will end up doing 75-odd per cent of last year from the same stores, about 22-25 per cent decline. This is based on our first five months’ performance; we are projecting for the next seven months.”
The company had clocked a total revenue of Rs 225 crore.
Bhatt said recovery of business has been slow as consumers have been really cautious and focussing more on savings with spending on beauty and salons being discretionary.
Moreover, he said that in Maharashtra, where the company has the highest number of outlets, there are still restrictions on services like facial and beard trimming, thereby limiting options for customers.
Besides, he said customers are wary about the safety aspects of COVID-19, although Enrich customers “are aware that we are quite ahead as far as safety and hygiene is concerned. We have been using single use towels and disposable items for years.”
The company has quality audit and mystery audit process to ensure safety and hygiene, Bhatt added.
Seeking support from the government, he said, “My request to the government would be to give us some consideration or some credit back of the GST of what all the companies would have paid in the last two years.”
Bhatt further said, “We are the people who have paid taxes religiously and honestly. In today’s time if the government wants to give any stimulus or financial aid, I strongly feel the GST credit can be of real help.”