JOHANNESBURG – Sixty-two year old Ian Fuhr is the unlikely baron of beauty salon chain, Sorbet – an idea birthed on a massage table ten years ago that today anticipates group turnover of R365 million for the year to February 2015.
“In 2004, I was lying on a massage table having just sold my business to Edcon, when the beauty therapist suggested I look into the beauty industry,” Fuhr recalls. After shrugging it off as a joke at first, Fuhr discovered that there was in fact a gap in the business. When it dawned on Fuhr that there were no beauty salon chains, only independently owned stores, he realised there was also substantial “business in the gap”.
After buying a couple of independents and running them for 11 months, he and his partners rebranded them ‘Sorbet’ in August 2005. The brand launched with six stores in Bedfordview, Norwood, Bryanston and Cresta.
From six to 116
Fuhr describes the first few years as the “dark days”, acknowledging he was lucky to have had some money from the R112 million-sale of Super Mart (previously K-Mart) to Edcon to throw into a “bottomless pit”.
“It took four years and 22 company-owned stores before Sorbet had its first franchisee,” Fuhr says.
Ten years on and the brand now boasts 116 stores, of which only six are company-owned. In an interview with Moneyweb on December 1, Fuhr said three new stores were due to open in Gauteng this week, one of them having opened in Ferndale that morning.
With stores spanning from Pretoria, Johannesburg, Cape Town and Durban, to Polokwane, Nelspruit, Heidelberg, Witbank and Port Elizabeth, Sorbet opened 56 stores in its first seven years and has opened 60 stores in the past two years.
“The demand for franchising is huge. We get 25 to 30 franchisee applications a week,” Fuhr says. To accommodate the demand, Sorbet has launched brand extensions that include dry bars (hair and nails only); Sorbet Man in Sandton City, with a planned rollout; and an ethnic hair salon brand, Candi & Co., being piloted in Randburg.
Franchisees pay 6% of net turnover as a flat royalty fee to the Sorbet Group, which includes their marketing fee. They are responsible for their own product procurement, but Sorbet negotiates preferential rates with suppliers.
Quite a few of the franchisees, mostly female and many from corporate backgrounds, own more than one store and nearly all of them were previous “guests” (clients) of Sorbet. Sorbet insists that franchisees are owner operators and won’t sell to investors who plan to hire an employee manager. “Every time we sell a company store to a franchisee the turnover goes up 25%. We can’t operate as effectively by remote control,” Fuhr explains. “You have to have someone on the spot who is committed to making sure service delivery is great.”
With more than 1 000 staff members, Fuhr personally does the full-day induction training of every new hire, giving him an opportunity to communicate the “people before profits” philosophy of what he describes as the “community”.
Through its Sorbet Empowering Women (SEW) initiative, Sorbet is training previously disadvantaged women in Western Cape townships to become nail technicians and eventually franchisees, in partnership with the Clothing Bank and cause-bracelets manufacturer, Relate.
Look out UK, Imbalie
Sorbet’s main competitor in the local market is AltX-listed Imbalie Beauty Ltd, which owns 150 own and franchised beauty salons that include Dream Nails, Perfect 10 and Placecol Skin Care Clinic. By the close of trade on Thursday, Imbalie’s share price was up 7.69% to 14c. Group revenue was up 14.36% to R49.2 million for the six months to August 31.
With Sorbet anticipating turnover of close to R500 million for the 2016 financial year, Fuhr says he has considered a reverse listing into Imbalie, but that this would be “distant, if ever”. “We’ve been approached by several different people who want to try and put that deal together,” he notes. For now, the controlling shareholders will remain Fuhr, his three children and niece, together with MD of the company Rudi Rudolph.
Meanwhile, health and beauty giant Clicks approached the beauty salon to launch a range of Sorbet-branded products and make it a Click’s Clubcard affinity partner. “Clicks anticipates this will be one of its biggest beauty brands in five years time,” Fuhr says.
In 2015, Sorbet will open its first store outside of South Africa in the UK.
Sorbet recently received flack on social media for its ‘Nancy’ campaign. Fuhr explains that it started as frivolously as FNB’s Steve needing a girlfriend. A billboard erected on Johannesburg’s M1 North read, ‘Steve meet Nancy. She’s unwaxed, unpolished and unloved’.
“There was one word used that was completely out of line, which was the word ‘unloved’,” Fuhr admits. “That just caused a hornet’s nest and rightly so. We apologised profusely to those who were offended. It was supposed to be fun, but we understood why people were upset by it,” he says.
* Fuhr recently released his book, ‘Get that feeling: the story of a serial entrepreneur’. It is available at Exclusives and on Kalahari.com