Beauty and wellness company VLCC is investing about ₹100 crore in upgrading existing clinics as well as adding new outlets. The company, which acquired men’s grooming brand Ustraa earlier this year, is also strongly investing in strengthening its presence on the e-commerce channel. The company said it is open to other inorganic growth opportunities.

In December last year, global investment firm, Carlyle, acquired a majority stake in VLCC.

Vikas Gupta, Group CEO, VLCC, told businessline, “In the past two quarters, we have seen a strong upswing in revenue growth. We are witnessing more than 100 per cent growth in customer acquisition in terms of our services business. We are doing a lot of capital expenditure on our strategic priorities. This includes investments behind people, R&D and upgrading infrastructure of our clinics as well as on technology to help us acquire new customers.”

The company has added 10 new clinics or salons in the past few months in India. VLCC Group’s operations currently span 310 locations in 139 cities and 11 countries, including India, Sri Lanka, Bangladesh, Nepal, Singapore, Thailand, the UAE, Oman, Bahrain, Qatar, Kuwait, and Kenya.

Nearly two-thirds of the company’s revenues come from its services business. “I think in this fiscal, in the services business alone, between customer acquisition and capital expenditure, , we would spend about ₹100 crore,” he added. Gupta said that “significant acceleration” in addition of new clinics is also on the cards.

Bullish on growth

“I am very bullish on the growth of the beauty and personal care sector in the country in the long-term. We believe VLCC is uniquely positioned due to its strong brand equity and omni-channel model. We aim to grow ahead of the industry growth rates,” he added.

In terms of its products business, VLCC has a direct reach across 110,000 outlets in the country besides a strong retail footprint in the wholesale channel.

“We are betting big on growing our assisted channel (where beauty advisers offer consultation to consumers) across general trade and modern trade stores for our products. At the same time, as a brand VLCC has been under-indexed on the e-commerce channel and our strategic thrust is on gaining our fair share. Our acquisition of Ustraa has helped us in gaining those capabilities. We are now also working on launching a D2C range of VLCC,” Gupta explained.

The company is stepping up investments on R&D and will allocate 4-5 per cent of its revenues in this space.

acquisition targets

Responding to a query on additional inorganic growth opportunities, Gupta said the company remains open for other acquisition targets that can help the brand gain further scale.

On an average the beauty and personal care sector is projected to grow at 10-15 per cent growth rate, while the premium segment is expected to grow at a higher rate. “ We are positioned in the premium segment offering highly efficacious products. The discretionary spends at the premium end have been rising despite macro-economic challenges,” Gupta added.

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