Thirty years ago, Italian-Australians Venessa and Elio Nappa opened their first hairdressing salon in Sydney. Little did they know that one day, their sons would take the reins and turn it into a $40 million business with a loyal customer base and plans to expand into omnichannel. Here, CEO Anthony Nappa discusses the business’ plans for the store network, his belief in physical retail, and the growth of the men’s grooming category. Inside Retail: Late last year, Oz Hair & Beauty receive
ived investment from Edison Growth Fund, BBRC, and Accent Group CEO Daniel Agostinelli. What was that journey like for you guys?
Anthony Nappa: In 2020-21, our e-commerce asset was hot. We had a lot of people approach us. Most people wanted to buy a majority stake, a lot of people wanted to buy all of it. My brother and I are quite young and we weren’t ready to just give it away. And then we came across these investors, who were unique and we were able to have a majority stake. No dickheads. You hear a lot about people in private equity trying to talk down to you, but for us, it was a long but smooth process. They were just good people.
They weren’t just offering money, they were offering expertise. We want to open up retail shops, so we got investors. Accent Group CEO Daniel Agostinelli not only has great experience, he’s got a great personality. He’s a normal guy, like my dad. You forget he’s the CEO of a public company, because he’s just so authentic, he’s no bullshit. That’s what we like.
Brothers Anthony and Guy Nappa in an Oz Hair & Beauty salon.
IR: You were saying you want to open up more retail stores, experiential showrooms. Tell me about that. What’s your plan?
AN: We opened at the Queen Victoria Building in Sydney two years ago, but that was before our new vision. That was a salon with retail. Now we’re renovating the QVB again, and making it a retail shop first, with services. So we want to be retail first, then services. We want to be able to click-and-collect from multiple locations. We probably won’t be as aggressive as Accent Group, but let’s get four right, then double down and keep doing more as we get it right.
IR: When’s the first one opening?
AN: QVB is the new concept. Hopefully before July.
IR: So obviously you’re a big believer in physical retail.
AN: One of our values is being customer-first. It’s impossible, really, to be customer-centric if you’re not available to them everywhere. Sometimes you don’t want to go into a shop, sometimes you just don’t want to buy online all the time. Sometimes you’re gonna do click-and-collect. If you’re not available all the time to people, then you’re really not that customer-centric. So we feel like we have to be, it’s part of our values.
IR: A lot of people have mixed feelings about the CBD and whether it will make a comeback.
AN: Look, at the start of the year, every time there was a Covid wave, people freaked out and then the CBD copped it hard. Landlords have been getting a bad rap, but QVB has helped us a lot, to be honest. Last week, I spoke to the manager and I congratulated them, because it seemed like we were back. We’re not kicking goals and winning medals, but we were back. We weren’t bleeding, we were actually doing pretty good. Sales were up to a good standard.
The thing about the CBD store is it’s not just about making pure profit, it’s about brand awareness. We’re in a really cool location and we want to make it look hot and like our brand.
IR: A lot of retailers have started focusing more on suburban areas for their stores. Is that what you’re thinking about doing, too?
AN: The suburban areas – that’s where the customers really are. We’ve already got a store in the CBD. So the next ones will be in the suburbs, where our customers are.
IR: Beauty did incredibly well during Covid-19, and then hair salons and services took a big hit, so you’re kind of on both sides of the spectrum, right?
AN: The product side for us obviously boomed. During the first lockdown in Sydney, the CBD was terrible. But the suburban salons were doing OK because they weren’t actually forced to close. When the salons closed for four months because of the second wave, everyone took a hit. And then from there, you saw a lot of hair salons started selling online to compete and a lot of people began working from home.
Our challenge now is how we can make hairdressing fun again. I think it’s up to us and the industry as a whole to make it fun and show hairdressers that it can be a career. That will bring more staff into the industry and it’s what we need to grow.
IR: I think the thing that’s cool about your business, though, is that when you bring hairdressers in, there is the retail side of the business that they can also get involved in.
AN: One hundred per cent. My dad was a big retailer. He wasn’t a Hair House, but he had a big retail presence in New South Wales and all the staff were trained to sell retail as well as being hairdressers. And our customer service team now are all ex-hairdressers and ex-beauty therapists, so we do offer different career paths.
IR: I think there is a societal issue that people don’t see retail as a career. They think it’s something that you do as a Christmas casual, and then you move on. But I think it’s up to the industry to show people that there are so many different career opportunities in retail.
AN: One hundred per cent. You can start working in one shop, and then eventually become a head of retail and you’re responsible for 90 shops. That’s a big career. You can get a lot of money to do that and different possibilities. There is career progression in retail.
IR: I think what’s interesting, too, is the way that we view young people who are store managers. My teenage niece works at Hungry Jack’s and she’s the store manager. That store makes a lot of money and it’s in the hands of a 19-year-old.
AN: It’s the best training. Our CRM manager was an admin three years ago. He’s 22 and he’s grown from there and kicking goals. That’s what I get a kick out of the most, to be honest. I think the stereotype of going to uni to become a lawyer…that’s a great career. But retail is a great career path.
IR: How do you think the beauty landscape has evolved lately?
AN: Covid brought a lot of people online and I think now they expect the same thing online that they get in-store, like the customer service. It really needs to be on point. Otherwise you’re just selling a product. You need to bring your expertise to it – customers want that. They want the same experience in-store as they can get online.
We’re obviously a lot more hair-skewed than our competitors, like Sephora, Mecca. We want to focus on hair, we want to be the authority on hair. So the way we brand ourselves, the way we talk, is all more hair-skewed because at the end of the day, we’re all selling the same product. It’s how you talk about it and represent it that lets you differentiate.
IR: Do you think you guys will launch your own range of products?
AN: It’s definitely on the roadmap. We’d just want to do it correctly. Home brands always appear to be lower quality, so we want to do it properly to maintain our brand equity. The products have to be just as good as [non-private-labels]. For example, L’Oréal – who knows what their R&D budget is, billions? You can’t rip a customer off and tell them your shampoo or conditioner is the best, when it’s really not as good.
IR: In addition to Oz Hair & Beauty, you guys also run a men’s grooming site called Above the Collar. Tell me about that.
AN: Our youngest brother runs it. We have a lot of male customers, about 40,000. We saw that men’s grooming is growing, so we thought we’d launch a men’s grooming site, a bit like Mr. Porter, so we can create an experience that’s tailored to men. It launched about 18 months ago and it’s made over a million dollars in sales.
IR: Are you looking at investing more into it?
AN: Yes. We want to have Above the Collar stores to differentiate ourselves from the competition.
IR: Where do most men go to get their hair cut at the moment?
AN: Most of them go to shopping centres and maybe I would, too, if I wasn’t in the industry. You’ve got to indirectly target men. Hair and beauty is a genuine interest for women, but for men, you need to do it indirectly. That’s why we want new branding and our site to become more editorial, but selling products aimed at men.