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Lakme changes makeup to fight competitors
Published on 24 Oct. 2009 11:02 PM IST
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Lakme Lever, the beauty and wellness services business of the country’s biggest consumer goods company Hindustan Unilever (HUL) that runs over 120 Lakme Salons across the country, has restructured its business model to take on aggressive competitors vying to capture the growing spends of Indian consumers on personal grooming. Lakme Lever’s hybrid business model – a handful of company-owned salons and over hundred franchisee run – will now be tweaked in favour of more company-owned salons, a top official said. The new business model will also involve launching another top-end variant, Lakme Studio. The salon is also being geared to be a specialised retail point to market Lakme’s personal care products. Lakme-Lever may also opt for a joint venture with a mall developer or a real estate major, once the new business model is in place. In an exclusive interview with ET, Anil Chopra, CEO of Lakme-Lever said; “We are working on creating and nurturing a service mindset that will be tuned into the consumer’s needs.” The move underscores the realisation in the organisation that a service-led business needs a service-led mindset, a move away from its product-driven mentality, that holds it in good stead while selling soaps and shampoos. “We are closely watching (the stores) catchment area with a focus on return on investment (ROI). Retail is essentially a real estate business. A lot of hard work that has gone into the complete brand transformation to ensure that the new services do not look like old wine in a new bottle,” he adds. Mr Chopra has a key role in the transformation of Lakme through its association with the fashion event, Lakme Fashion Week. He joined Lakme Limited in 1974, when it was part of the Tata Group. The business was acquired by HUL (then HLL) in 1999. Lakme-Lever has shut down a couple of company-owned Lakme Salons which will be re-launched as high-end specialised beauty centre, Lakme Studio. The remaining lot of 118 Lakme Salons are also being refurbished. A tie-up with a JV partner could happen after a couple of months. “Currently, we have not negotiated anything. After six months, as we go into another expansion model, we will look at partnerships with a real estate player or a mall developer, before that the initial infrastructure has to be in place. The core team is focusing on it (currently).” Analysts say the move could be an indication that HUL is keen to ensure higher contribution from the salon business to the company’s sales and profits.

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