Fall 2012 A Perfectly Polished Concept
Rick Elbaz, Zohar Liran and Renen Nachshon, managing partners of LAKA USA in
Las Vegas, NV, a boutique-style kiosk, offering on-the-go manicures with a high focus on fashion, had success land in their hands. Literally.
One could say that Rick Elbaz’s specialty retail endeavors have paved the way to this newest endeavor. Elbaz has enjoyed success in a variety of specialty retail categories including toys, candles, cosmetics, massagers, aromatherapy, and car and cellular accessories. Especially relevant to LAKA is Elbaz’s experience in cosmetics, through Fine Beauty Cosmetics, Inc.,
a cosmetic and skin care line he has been running since 2007.
Introduction to concept
It was during a recent visit to Israel that Elbaz came upon the LAKA kiosk—it offered fashionable manicures on the go. LAKA Manicure Express Ltd. had been launching kiosks throughout Europe and in countries such as Spain, Sweden, the UK, Panama, South Africa and more. The idea of on-the-go manicures excited Elbaz so much that he entered into a partnership with company founder Sharon Konopny. A joint partnership, bringing over 20 years of retail experience, between Fine Beauty Cosmetics, Inc. and LAKA Manicure Express, Ltd. was formed.
Elbaz immediately saw this as an opportunity far bigger than owning a few kiosks himself; he envisioned hundreds of specialty retailers throughout the nation rolling out the concept. Managing partner, Zohar Liran, agrees, “We don’t have a lot of places to go that offer on-the-go manicures in the United States—especially with a focus on high fashion. It is missing here and the malls are a perfect setting for such a service,” Liran says.
Liran points out that manicures in traditional salons are expensive and not always trendy. On the other hand, an express manicure at LAKA has an eye on the latest trends and delivers high fashion at just $14. Time is money too—LAKA guarantees an express manicure in 15 minutes or less. Liran says this combination of fashion, speed, efficiency and price has lead to sizeable profits in most locations. “We have seen in every location—Israel, Spain, Hong Kong—between a 25-30% profit,” he says.
Even if manicures-on-the-go is the selling point at LAKA, most kiosks also offer pedicures. Most LAKA kiosks have five manicure and two pedicure stations. “At busy times, we are fully staffed and serve all the stations at once,” says Liran. If all stations are full, keeping an eye on professionalism, customers are put on a waiting list, given an approximate time, and contacted when a station is free. This enables customers to continue shopping, Liran says.
To encourage future visits, LAKA offers customers a free service for every ten they buy. LAKA also plans on rolling out a VIP Club in which customers receive 10% off all products and services.
Attracting customers to the high-fashion LAKA kiosk is as easy as attracting kids to candy, with nail colors just as inviting. In fact, a LAKA kiosk has 144 of them, in every shade imaginable. Customers can treat themselves to neon orange toes, pastel blue fingers, or the perfect color to match the outfit they plan on wearing that night. If a color is the latest trend in the fashion magazines, it’s on the shelf.
Express manicures and high fashion are the focus here. “In the training, we place a huge emphasis on that. The whole aspect of on-the-go is very important and so is the cutting-edge fashionable look we bring,” says Liran. For customers with time for further pampering, LAKA offers full manicures, pedicures, and treatments such as cuticle repair.
Liran adds that customers who visit are also fashion-conscious consumers who sometimes visit as often as once a week to change their nail colors to match the outfits they wear.
LAKA also sells products that complements the services offered. Hand creams, nail polish touch-ups, corrector pens and nail files are top sellers. Non-acetone based polish remover, the LAKA manicure kit, and peeling creams, are also best sellers.
Design focus on fashion demographic
The LAKA kiosk delights fashion-conscious customers with its modern glam elements, Liran says. There are elements of color everywhere highlighted against the futuristic white kiosk. The company name glows in bubblegum pink; the brightly colored nail polish bottles are ever inviting and modern white stools and pink cushions are used at stations.
“Although it is open it still feels intimate inside,” Liran says. Colorful barrels that give the feeling of being in an industrial nail polish plant are a perfect fusion of the industrial world and high fashion, Liran says. The kiosk’s trendy and fashion-forward design won it recognition as an innovative design concept by FRAME, a design magazine.
“Girls like the decoration. It is fun and exciting,” says Liran, who adds that the target audience is between the ages of 18-35 although many younger girls love LAKA as well. The younger the customer, the faster her fashion world evolves. LAKA knows this and works diligently to keep up with current fashion trends. Company officials scour markets constantly, following tabloids, designers and Hollywood starlets, to deliver the trendiest colors possible in the timeliest fashion.
Retailers can nail concept
Because of the emphasis on customer service, LAKA chose to organize the business as a franchise, thus “lessening the learning curve by delivering the business in a box.” All the guesswork is eliminated, making this a perfect opportunity for a first-time retailer.
“Most retailers probably have a lot of experience in [selling product] but not in service,” says Renen Nachshon, managing partner. “This is a perfect combination of both retail and service.”
Before taking on a franchise, prospective franchisees are invited to attend LAKA’s discovery days. Discovery days give interested candidates the opportunity to visit one of LAKA’s locations, along with corporate staff. “The interested parties will have the chance to speak with the local franchisee, ask questions and get feedback,” says Liran.
“Once a person or group goes forward with the franchise, they receive constant training, before opening, during opening days and constant support thereafter,” Liran says. A LAKA representative visits at opening—and annual visits to train employees and answer questions are also offered.
“The advantage that retailers get from joining the LAKA family is the continuing guidance of our staff,” says Liran. “Retailers get guidance on how to properly service their customers, in addition to a detailed manual on how to hire and train.”
Training includes every step of the sale, including how to increase the average ticket price. “As we are doing the treatment, we have the customers in our hands,” says Liran. “We can talk about how to put the polish on to keep their nails healthy and make it last longer and what the benefits of the products are,” says Liran, who adds that the company’s focus on fashion often attracts customers. Upselling is important, leading to an average sale of $40. Franchise fees were not disclosed, however Liran assures retailers LAKA gets them a great deal in return for franchise fees.
Custom-built kiosks are an additional expense retailers must usually consider. LAKA has an established a relationship with a Las Vegas kiosk manufacturer—retailers can take advantage of these cost savings. They can also work with another kiosk manufacturer as long as the kiosks are built to specifications.
As far as staffing, nail technicians are required at each service booth. Two additional employees to help with payment and the sale of complementary products are recommended.
LAKA works with mall leasing managers to secure strong locations near complementary retailers, such as Victoria’s Secret, Forever 21, Urban Outfitters, and other large retailers that target this same audience.
Young, cool and trendy
To increase exposure, LAKA will be advertising nationwide. But what proves most effective in this market is word-of-mouth. With luxury this convenient and affordable, word tends to get around fast. By making an affordable luxury convenient, and instituting loyalty programs, it comes as no surprise that repeat business at LAKA is huge. “We have close to a 100% return rate for people who have seen us before,” says Liran.
“Ours is the young, cool and trendy brand,” Liran says and every aspect of the fashion forward concept is crafted expressly to make heads turn. “LAKA is not just a treatment salon; its core essence is fashion.”
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