Strong performance in Shaver Shop’s core hair removal and hair styling categories has delivered 8.7 per cent like-for-like sales growth in the four months ended April 30, 2019, up from 0.8 per cent in the same period last year, enabling the specialty retailer to narrow its full-year profit guidance.
Shaver Shop now expects normalised EBITDA to be between $12.5 million and $14 million for FY19. It previously was expecting between $12 million and $14.5 million EBITDA.
“I am very pleased that our like-for-like sales growth is predominantly being driven by a number of our core hair removal categories which is where our store teams excel,” Cameron Fox, chief executive and managing director of Shaver Shop, said in a statement on Tuesday.
“Hair styling, following the launch of the ghd range around the same time last year, is also performing very well.”
Big-name brands drive foot traffic
Ghd, or Good Hair Day, is a leading global brand of hair straighteners, blow dryers and other styling tools. Shaver Shop started selling a range of the high-end products in Australia in late May 2018, and launched a range in New Zealand on Monday.
Shaver Shop has previously said the addition of the ghd brand is an effort to grow its female customer base. Ghd, along with other big-name – and big-ticket – brands like Dyson, also drives foot traffic to stores, since customers tend to want to touch and feel the products and get expert advice from staff before shelling out hundreds of dollars on the equipment.
Flair, Shaver Shop’s private label brand launched last year, is gradually replacing the entry-level brands the retailer previously offered. Finding the balance between more profitable private-label sales and foot-traffic-driving brand sales will be a key focus for Shaver Shop going forward, according to Fox.
“[Flair] is only going to replace the commodity brands we had in the past. We don’t want it to be a market leader. Those [big] brands will continue to be the brands that bring shoppers into stores,” he told Inside Retail.
Shaver Shop’s private label range also includes the Shaver Guard line of lubricants and cleaning products for shavers and beard trimmers and the LumiSkin line of skincare products.
Investment in CRM solution to drive loyalty
On Tuesday, the retailer also announced the implementation of its first-ever CRM solution, which it expects will significantly enhance its ability to engage with customers on a more personalised and timely basis across any retail channel.
Fox told Inside Retail that the solution, provided by software giant Salesforce, will deliver a “quantum lift” in its already 120,000-strong customer database. The solution will also enable the retailer to offer a loyalty program in future.
“This is actually something that’s incremental to us,” he said.
Shaver Shop’s investment in Salesforce represents its commitment to omnichannel retail, which Fox said has delivered solid online sales growth so far this half. Online sales now represent 11-12 per cent of total revenue, he said, and the channel continues to grow.
Besides its own e-commerce site, Shaver Shop also sells through eBay. Fox noted that it has taken some time for the retailer to get its marketplace range right to minimise the erosion of gross profit margin on the sale of exclusive products through this channel.
“There is the commercial consideration that you’re paying more transactional fees and potentially eroding gross profit margin…but there is a shopper who solely shops through eBay,” he said.
Store network expanding
The retailer has also been investing more in staff training and adding more staff to stores to improve its level of customer service, and the effort is paying off, according to Fox.
“We’re not just measuring whether store staff hit their sales target, but [we’re measuring] the level of customer service [provided] and how many customers who walk through the door are being converted into a transaction,” he said.
Shaver Shop currently has 121 stores across Australia and New Zealand. It will open its 122nd store, and its 7th in New Zealand, in Westfield Newmarket in Auckland in early FY20.