Hair Extensions

Mass market manufacturer Unilever is venturing further into retailing to strengthen its brands and generate greater profits. Building on its trialling of e-commerce – myhome.co.uk – and bricks-and-mortar style Ch’a tea shops, Unilever is soon

In an attempt to secure new channels of distribution, mass market manufacturers are setting up as retailers and service providers. In October, Unilever company Elida Fabergé is to open a men’s hair salon on London’s Oxford Street. The salon is being treated as a brand extension of the company’s male toiletry brand Lynx, and eponymously-named.

The salon is the first of three due to open in the next six months, and a nationwide roll-out is planned for the next three years.

The 15 staff of the Lynx Barbershop will offer haircuts for &£15, facials, an “indulgent” shave, beard trims and manicures. In contrast, perhaps, the surroundings will be crammed with objects of laddism – PlayStations, Gameboys, lads’ mags, personal CD players and TV screens – beloved by the 16- to 24- year-olds Lynx is targeting. Patrons will even be able to buy Lynx-branded grooming kits and T-shirts.

“We are experts in male grooming and so this is a natural extension for a brand such as Lynx. The hair salon market in the UK is very fragmented and currently there is little or no provision for young men,” says Elida Fabergé chairman Keith Weed.

It could be seen as a canny move, though the men’s grooming market is hardly a go-go sector, according to research from Mintel.

The men’s toiletries report reveals that between 1995 and 1999, retail sales of men’s toiletries grew by 14 per cent to &£571m – slightly over three per cent a year.

One reason Mintel gives for the lacklustre performance is the lack of competition to leading brands Lynx and Gillette, and these brands’ reluctance to break into new markets. But, now with Lynx Barbershop, Unilever is making a play to challenge the market inertia.

However, Morgan Stanley Dean Witter personal care analyst Sylvain Massot says: “This is obviously stretching Unilever a bit. It’s a mass market manufacturer, not a retailer. It is looking for growth from services, online initiatives and now retail, to increase distribution of brands and drive awareness.

Massot says the Lynx initiative does demonstrate “Unilever’s new open-minded approach” to business development.

Boots has already recognised the significance of men’s toiletries and the grooming market by opening two trial outlets specifically devoted to men in Edinburgh and Bristol.

A Unilever think-tank charged with understanding the changing nature of consumer needs has come up with other “incubator projects” to generate greater profits. These include Myhome.co.uk, a home cleaning/laundry/dry cleaning service using Unilever’s Persil and Jif brands.

Operating as a pilot in south-west London, Myhome.co.uk plans to offer other home services such as gardening, domestic repairs and home security. It claims the business employs 150 staff and has a base of 1,400 customers.

Prices start at &£39.99 for cleaning a one-bedroom flat. Unilever hopes to capture 20 per cent of the &£1.3bn UK home cleaning market within four years, producing a turnover that would be more than its best-selling brand Persil provides.

Attempting to emulate the success of coffee chains such as Starbucks and Aroma, Unilever subsidiary Van den Bergh launched two tea shops last year through its out-of-home division. Called Ch’a, the tea shops offer customers the opportunity to taste and buy different types of loose tea as well as purchase existing products such as the green tea brand Tchae and Brooke Bond tea bags. VdB has yet to decide whether it will proceed by launching its own shops or entering into franchises.

A spokeswoman for VdB says: “It is still going through the learning curve, but the shops are proving very successful.”

“We are a multinational company and this is a new area for us. If we are going to do it properly, we have to understand it well.

“It’s a case of step by step and I wouldn’t presume that the next will be a national roll-out. But there will be a next step.”

Rival Tetley was the first of the UK tea manufacturers to launch a tea shop in 1998. But despite reports that the tea company was in talks a year ago with various partners interested in operating a chain, Tetley has yet to announce any roll-out plans for the concept called Gaffers. Sara Howe, business development director for Tetley, denies that the project was put on hold while the company was bought by Tata Tea.

Nestlé has also moved to capitalise on the out-of-home market by launching Café Nescafé. The first coffee shop concept was launched in 1997 in Bentall’s shopping centre, Kingston. Since then it has burgeoned into 34 outlets through franchise deals. These include one with Granada Motorway Services – which has opened 13 outlets in the past year – and another with Internet outlet Easyeverything (six in-store Café Nescafés). Nestlé claims there will be a total of 50 Café Nescafés in place by the end of the year. Nestlé’s franchise package means sites are owned and run by third-party operators.

Similar concepts are being developed by other markets including Germany, Japan, the US, France and Latin America.

Danone, through its HP Foods subsidiary in the UK, is also looking at the out-of-home market and has extended its Amoy brand into a restaurant.

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