Aalim Hakim And How India’s Salon Business Is Taking A Pandemic Haircut
One of Aalim Hakim’s celebrity clients decided to cut his own hair last week, courtesy the Covid-19 lockdown. Hakim coached him through it on Facetime. How did the haircut turn out, I ask Hakim. Oh-kay, he says and laughs. It’s tough to cut hair with a reverse view, he says in defense of his loyal customer.
Hakim is hairdresser to stars. Filmstars—Salman Khan, Katrina Kaif, Shahid Kapoor, Hrithik Roshan, Ajay Devgn, Sanjay Dutt... Sports stars—Sachin Tendulkar, Virat Kohli, Ajinkya Rahane, Hardik Pandya. Their pictures dot his website and social media. It’s this calling card that helped him establish a chain of 10 salons, three self-owned in Mumbai and the remaining franchised across Pune, Bengaluru, Ahmedabad, Surat and Jaipur.
The business is self-funded, he says in a late evening interview over the phone. “I’ve always believed in making more money by having less salons. I’ve always believed in more quality. And I know if we believe in our art, people will come to us,” he says.
He seems like a conservative businessman. “I’ve never taken a loan for the business,” he adds. “We started with small capital and we made profits right from the beginning. And then we converted into a franchisee brand. I know how to manage costs. Film producers take months to pay us for our services, yet we have to pay employees and the taxman on time. Even now, I’m owed over Rs 3 crore by producers,” says the celebrity hairstylist.
But if business remains shuttered like this for one more month, he will have to take a Rs 3-4 crore bank loan, Hakim admits, his first business loan ever. And though his tone stays cheerful through the conversation, he also seems resigned to the fact that the salon business will take a long time to recover.
“How Your Boss Is Standing With You Is Very Important”
Like most luxury salons, Hakim’s Aalim offers a wide variety of grooming services from signature haircuts to manicure, pedicure and bridal make-up. The chain employs close to a hundred stylists and support staff, Hakim says. Most earn a mix of salary and commission of 30 percent and more on each service. The salon keeps just 10-15 percent of the service price, as the rest is consumed by expenses—from utilities to security and reception, and guest service to marketing, he explains.
Despite the lockdown all staff salaries were paid in full in March and April because this virus challenge has to be fought on a “humanitarian ground”, he says. “How your boss is standing with you is very important.”
Yet, the lack of commissions must be hurting those who have big rent and loan bills to pay, he acknowledges. He tried to keep them engaged in daily training sessions on Zoom. The sessions serve as reskilling as well as ideation platforms. On how to restart the business.
“I’m A Hairdresser, Not A Businessman, Businessman”
“We’ll not reopen all outlets immediately”, Hakim says when I ask about his reopening plans once the nationwide lockdown lifts and non-essential businesses like his are allowed to resume. Some countries like Australia allowed hair salons to stay open as an essential service even while other businesses were locked down. The U.K. and France are only now lifting restrictions. Some states in the U.S. still prohibit their reopening, whereas others have allowed “by appointment” services only. India is implementing a tentative zone-wise exit from the lockdown, with salons in orange and green zones allowed to reopen. Hakim would have liked to first reopen his flagship store in Mumbai’s Bandra area, though currently the city falls in the red zone.
A small team of us will open one or two salons and see how to implement a more frequent sanitising system, how to space appointments, he says. Experimenting with this on full overheads won’t work. “It’s not easy to keep sanitising a place 24 hours. How the system will work economically, how our pricing should increase, if it’s the same price are we making profit or not, and if we are doing business in loss then what’s the use?”
Social distancing—keeping a chair empty between clients, disposable towels, face shields, masks, gloves and aprons for salon staff and clients, even disposable tea and coffee cups, sanitising all equipment after every customer—all this will add to costs by a few hundred rupees at least per client. It will also consume time and mean fewer clients.
There’s another downside.
Yet, regaining the confidence of clients will be critical, he admits. “We will make short videos on our hygiene and sanitary efforts and share them on social media.”
What about offering home services? “It’s not easy. There’ll be hair in your house all over. How somebody’s going to shampoo your hair? There’s no backwash at home,” he says referring to salon basins. Hakim distinguishes between “luxury” services his salon offers and the home services offered by companies like UrbanClap. Those are for corporates (office-going people), who just want some ‘office' haircuts, he says, not people who believe in fashion. For massage and all it’s fine, he says, but when it comes to creativity it can’t be home delivered.
The other thing he’s averse to are discounts to bring customers back.
“I’m a hairdresser not a businessman, businessman," he says repeating the word to underscore creative versus commercial. “For hardcore businessmen they will give discounts and adopt new pricing and marketing strategies. We will never discount.”
It will take a month or two of trying new operational strategies to understand if the business is still viable, Hakim says. Landlords may allow delayed payments but aren’t reducing rents since for many it’s their only income. The cost of utilities isn’t going down either. “On that basis, we will have to build the confidence whether we can increase the price. Or if we are keeping the same price, how are we going to distribute commissions and take some money home. If you’re just breaking even, then it’s actually a loss, you are wasting your time.”
His optimism returns quickly. As we discuss the mechanics of taking a bank loan, he asserts—“It’s okay, I can rebuild the business. I believe in the business. I made my business when I was not a big name. Now it’s very easy for me to rebuild as the name has already been built. I’m very confident that I can rebuild it. For me, it’s important my team should not suffer. Why should they suffer because of the pandemic. We all will struggle together. For the brand.”
The beauty salon industry employs atleast a million people. Not all will have a brand or a bank loan to fall back on.
This is the first in a series on how small businesses are coping with the pandemic-led economic crisis and what they are doing to survive.