Hairhouse Warehouse outlines expansion plans

hiarhouseHairhouse Warehouse is poised to open its first outlet in the Northern Territory this financial year as part of its drive to add up to 60 new stores within the next five years, bringing its total to close to 200.

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This week, CEO Arthur Mitroulas and franchise development manager, Peter Fiasco, also confirmed that the franchise chain was working on a new, complementary kiosk model and store design to take it into the future. And they revealed the group was eyeing international expansion into markets such as New Zealand, the US and the UK. But no overseas announcements are imminent at this stage.

“It’s a ‘watch this space’ scenario at present,” Mitroulas said. “We want to do this properly. We want to make sure we are properly prepared.

“We still have quite a lot of room left to grow in Australia – for example, in Western Australia and NSW,” added Fiasco. “We don’t believe in opening stores for the sake of them. We open stores after our research shows us that there is a gap and a need in a market that we can fill. There’s plenty of growth in Australia to be had for us. At the same time, there is also potential for our brand internationally because there aren’t many brands that do what we do.”

The store design profile that fits the Hairhouse Warehouse business best is an open shop front with a side salon, which Fiasco said makes the model look credible from both a retail and salon perspective. “We have pretty much mastered our footprint, but we are constantly reviewing and getting feedback from customers and are working on a new concept store design which we believe we will be able to launch in the first half of 2016 and take the brand to the next level in Australian retailing.”

This model would take on more of the digital side of retailing and refine the customer experience and visual merchandising. The plan is to take advantage of new technologies to enhance the customer experience, while still sticking to the Hairhouse Warehouse core values of providing great service and advice.

“When someone leaves one of our stores, we want them to say, ‘Wow. I want to go back there,” Fiasco said. “Our new store of the future won’t be a complete turnaround, but an evolution of where we are now. It will take that experience to another level.”

Location, location
Hairhouse Warehouse, started by brothers Joseph and Tony Lattouf in 1992, currently has 136 stores. It opened two new stores a year in both the 2013 and 2014 financial years. And, in the most recent financial year, it ramped up its growth by opening seven stores. This will be followed by a further 12 in the 2015/16 financial year.

Fiasco said the group was close to identifying a site in Darwin and was currently interested in talking to potential franchisees in the NT, noting that its Australian expansion focus also included regional areas where its products are typically hard to obtain.

Fiasco added that the group’s challenge wasn’t merely about finding locations in shopping centres, but finding centres that fit their brand and their model.

“It’s about finding the right location within a centre that fits our brand and our model,” he said. “There is a misconception that our brand is looking for locations in fashion runs, for example. That’s not the case. We are actually looking for locations in those discretionary spend runs where people are going into supermarkets and then are interested in additional shopping. That’s basically who our customer is.”

Mitroulas added that whatever is offered at store level is also offered for purchase online via the Hairhouse Warehouse website. And e-commerce is a big part of the strategy when working with franchisees.

“We do a lot of work with our franchise partners on our online strategy, so that they can understand what we are doing and how they can benefit from it,” Mitroulas said. “We are also changing our platform so that we can become an omni-channel retailer with a more integrated, company-wide experience for our customers. There are some interesting initiatives that are happening here and we will start launching these in the not too distant future.”

The counterfeit challenge
One of Hairhouse Warehouse’s biggest challenges at present is stopping the sale of counterfeit or non-authorised products in other retailers, especially in mass channel competitors. Mitroulas and Fiasco are concerned that other retailers are selling counterfeit – or what they classify as ‘unauthorised’ – product, which is often coming from parallel channels rather than direct sources.

“A reason why this is concerning is that we guarantee that all our products come from the correct channels and do what it says they are going to do,” Fiasco said. “When it comes in through these other parallel channels, although the packaging may look the same for some products, the chemical composition may be very different. For example, it may have been manufactured for the Asian market, where there may be more lax rules around the composition of a product.

“The result of using that product here in Australia may be very different and there is no guarantee in the quality of the product. Also, we have sometimes found that parallel product can be several years old and has been sitting in a warehouse somewhere before it’s finally imported into Australia and sold by these mass retail channels. So the quality can’t be guaranteed and consumers are not being told the truth about these products.”

This story first appeared in Inside Retail PREMIUM issue 2054. 

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