Business Irish

Friday 22 September 2017

Sugar Cubed gives prices a haircut as top stylist embraces spirit of austerity

Brown Sugar's Mark O'Keeffe
Picture By David Conachy 22/08/2011
Brown Sugar's Mark O'Keeffe Picture By David Conachy 22/08/2011
Nick Webb

Nick Webb

IT'S ONE of the only businesses where too much cutting isn't a bad thing. Hair and make-up destination for the stars, Mark O'Keeffe's Brown Sugar hair and make-up salon business is defying the downturn and making a bet on recovery.

Brown Sugar is one of the slickest and best connected salons in the business. The salon was splashed over the glossies and style magazines when it did the make-up for the likes of Rosanna Davison and Amy Huberman at the recent red carpet event for the Irish Film and Television awards. It's got an A-list client book as long as your arm.

But O'Keeffe isn't pulling in the horns despite the weak economy. He's going to expand with some gusto. Crucially, he feels that he's spotted a new segment in the market and he's going for it with the opening of Clarendon Street salon Sugar Cubed. You don't get to the top and stay there by standing still.

O'Keeffe opened Brown Sugar on Dublin's South William Street in 2005. The Street is known as 'L'Oreal Avenue' because of all the hair and beauty salons. There's another Brown Sugar in Blackrock. "We hit the ground running and knew we were on to something. We continued to grow until the bubble burst. It was slow hitting us though. People were talking about the recession probably for a year and a half before it affected us." Customer numbers slowed in late 2010.

The slowdown in the economy and a drop-off of certain types of customer led O'Keeffe to examine options for the business and to really analyse the market. He thinks he's found a whole new demographic of potential customers not being served by the industry – the seriously slick 18-28 year old who wants a smoking hot hair style but at a more affordable price. There are plenty of high-end salons but they cost a bundle.

"It's the Topshop/River Island client. They know what they want. They are very clear about what is cool and what is not. They change their look very regularly, so they're very conscious about what's evolving in fashion and they can't come into Brown Sugar all the time because it's too expensive." These clients will have different demands. Instead of more traditional highlights, they'll be after funkier colours and on-trend styles.

O'Keeffe was wary that expanding his operations may cannibalise his existing client base. "If I open a new Brown Sugar, I'll just be eating out of the same, smaller pie. I don't want to do discount hairdressing but I need to open a salon that is cheaper."

Brown Sugar charges between €73 to €95 for a cut, while Sugar Cubed is pitching itself at between €43 to €55 – a significant discount.

The move, which will see staff numbers jump from 44 to 60, was funded by investors rather than through traditional bank finance, according to O'Keeffe. Despite being a strong cash-generating firm, banks are slow to offer finance.

But the new venture will need to make a return. The economics and business model of high-end hair and beauty is pretty straightforward.

Women are the key. "Around 85 per cent of our clients are women," he says. Higher margins are made from cuts by the top stylists than from more modest blow dries.

Buzz cuts for men are a less lucrative market segment. "We have a very high percentage of men, which we are very proud of. We charge €45 for a man's hair cut but we'd put almost as much time into doing it as a women's haircut, so we wouldn't make as much money out of it."

While Department of Finance chief John Moran may check in at his local Spar to gauge the strength of an economic recovery, he'd be as good to book an appointment to get his locks done by O'Keeffe. Hairstyles are seen as a barometer for the future direction of an economy and serve as a gauge of discretionary spending levels.

"I'm seeing a lot of longer hair. People are growing it. People can't afford to have it cut all the time," he said. "You need to maintain short hair, you have to be in every six weeks. With longer hair you could come in every 12 weeks."

O'Keeffe also points to the Balayage trend, which is a new way of dying hair by hand rather than using the more traditional cap or foil. It's a less structured look. It's also more economical as you don't have to get it redone as soon as your roots start showing. Stylewise, it's hotter than a lava-filled potato. "Is it a coincidence or a convenience that this is around now? I think it's a convenience because the maintenance of this colour is far, far less expensive."

More women with immaculate blonde crew cuts could be one of the strongest signs that the recovery is under way.

Irish Independent

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