Hairhouse Warehouse, this year celebrating its 20th anniversary, has announced a partnership with retail behemoth, Myer, which will see the launch of a new concession store model.
The hair and beauty franchise, which has 136 stores across the country, has enjoyed a long list of successes over the years: a plethora of industry awards including the 2011 Franchise Council of Australia Franchisor of the Year award as well as being named the 2011 BRW Most Successful Private Business of the Year. Hairhouse Warehouse is also laying down plans for its first international stores, and most recently, the franchise has confirmed its entry into Myer department stores.
Arthur Mitroulas, CEO, told Franchising, “We’ll be a concession store that is on the cosmetics floor of Myer, because that’s where women are thinking about their beauty. It’ll be open-plan, 25 to 30 sqm, and we’ll be using a beauty room for more professional services”.
These professional services will include hair extensions and other hair treatments and possibly piercing services too. Eighty percent of the space will be retail and the stores will also have a Style Bar, where women can pop in for a quick style or consultation.
“We’re going to have a two to three station area which we’re going to call the Style Bar and that will take up about 20 percent of the space and will offer very specialised, heat-styling services such as blow-dries and one-on-one education for consumers. Predominantly the services on the floor will be about heat-styling and cuts, so women can come in and get their weekly blow-dry. It will be about fast service and very, very dynamic service,” he says.
The attraction of entering into a partnership with the leading department store chain is that Hairhouse Warehouse can add top quality, salon-exclusive products to Myer’s product range, adds Mitroulas.
“The big difference is that we offer salon professional brands. We never stock Remington, we never stock Vidal Sassoon, they’re not professional products. You can find them anywhere in Priceline, Myer and supermarkets. We have unique products that are salon-only and those include products like GHD for electricals, Redken for haircare, KMS and Loreal Professional. This will be the first time where customers can purchase professional salon products from a Myer department store.”
Not only will Hairhouse Warehouse expand Myer’s haircare offering, but it will also bring its commitment to professional, attentive customer service to the department store’s floor.
“We know that Myer has a big challenge around customer service. One of their biggest interests in us is that they love our customer service, because we’ve got a lot of people on the floor, they’re creative individuals and they’re all about customer service. They’re going to give customised service. It’s a whole new experience that’s going to happen in Myer, which they’ll love,” says Mitroulas.
The first Hairhouse Warehouse concession store will open in late September at the Myer Melbourne in Bourke Street Mall. It will be company-operated, with plans to franchise the concept soon after.
“We’re currently reviewing a site in Bondi and we’ve actually allocated 25 to 30 locations that would be suitable across the country. All CBD sites across the country – Queensland, Perth, Adelaide – and then what we call A-grade sites such as Chadstone, Doncaster and Chatswood.”
Over the next two to three years, the franchise hopes to have approximately seven concession sites up and running in Melbourne, the same in NSW and the remainder of the 25 to 30 stores spread across Australia.
“We will only run them if the franchisee agrees to run it,” Mitroulas says. “That’s why we need to make the CBD [Myer Melbourne] site work because it doesn’t affect any franchisees. We want to be transparent with all the franchisees and show them how it’s performing, what the business model represents, because it’s different to the existing model in the sense that the rents are different; you’re dealing with Myer, not a landlord.”
The opportunity to operate a concession store will only be available to existing franchisees, and Mitroulas says the offer will come at about one-third of the price of a regular Hairhouse Warehouse fit-out, which is usually somewhere between $160,000 and $230,000.
According to Mitroulas, franchisees are enthusiastic and excited about Hairhouse Warehouse’s plans, not just because the franchisors have assured them they will only go ahead with the openings if they’re on-board, but also because they see the new model as a marketing initiative, not a threat to their existing stores – even if they are in the same shopping complex.
“We don’t believe that [cannibalisaion of sales] will happen at all. We actually feel it will enhance business because what we’ll have the opportunity to do is communicate to customers of Myer, and where we don’t offer services at the Myer location, we can transfer them to our normal location in the shopping centre. There will be a lot of cross-promotion by default and there’ll be more advertising for the brand,” he says.
“They know about this. They’ve already started enquiring about it with us and they see it as a good opportunity because they can leverage more buying power with their suppliers. It gives their team and their stylists an opportunity to have some diversity in what they do each day and it gives them more wealth creation and more profitability.”
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