Singaporeans are definitely no strangers to Mary Chia, the beauty chain, as well as its eponymous founder. The company, then in 1988, broke new ground when it incorporated slimming services at its beauty practice in Yishun.
The move proved momentous, as from here, 14 more outlets would follow. 20 odd years later, Mary Chia Holdings (MCH) ushered in a new era in its corporate history as it took the leap to go public.
As a business, MCH is probably as straightforward as one can get. There are no marked-to-market derivatives to value, no complex hedging mechanisms and revenue is recognised when services are rendered – plain and simple.
These are virtues to behold, made more so in uncertain times. So it is probably as good a time as any for this iconic homegrown beauty and wellness chain to launch its IPO, in spite of the challenging economy.
Wendy Ho, the founder’s daughter and CEO, said that plans to go public have always been an objective. “We feel ready, and we want to expand, organically as well as through acquisitions,” she revealed.
Established Brand Name
In an ultra-competitive industry, its recent Catalist listing will no doubt serve to strengthen brand awareness.
However, what MCH has going for it was built up way before this. Through the years, its name has became synonymous with that of beauty, an image entrenched through conscious marketing efforts to position itself at the top end of the market.
But such is the fortitude of its founders that it has not shied from further diversifying to tap new trends and income segments. “In Singapore we will expand through bringing in new brands and new concepts,” Ho explained.
Besides its 10 Mary Chia lifestyle and wellness centres located across the island, the group also operates four outlets under the Urban Homme brand, which targets the metrosexual male.
While these outlets are a picture of opulence, its latest concept store, Mentsu, which opened recently in June at the swanking new Tampines 1 mall, adopted a snazzier approach to rope in the younger crowd.
Its 16th outlet, a family-oriented spa at Jurong’s SAFRA club, is on track to open in the last quarter this year. And it is targeting to tap into the expected upsurge in tourist arrivals that will stem from the opening of the Integrated Resorts. Ho revealed that they are considering setting up a limousine service to bring in customers from hotels.
Immediate plans have also focused on developing their presence in the region. The industry will stand to benefit from the area’s increasing affluence and MCH’s integrated scale of operations puts it in pole position to take advantage of the growth dynamics.
It has expanded aggressively, opening three outlets in less than two years across the causeway, in and around the capital city. “So far, we are still in the process of building up our name in Malaysia. We expect contributions to increase this year,” Ho pointed out.
In the longer term, ambitions are high in establishing a global footprint in the Middle East and China. Ho exuded enthusiasm when asked about her plans to make Mary Chia a global name. “China’s huge population is a big draw.
People there also prefer overseas brands and as such, we would be more readily accepted.”
The decision to venture into the Middle East was also due to customers from the region, whom Ho said are regular patrons.
“These customers suggested that we should consider expanding there as the market is dominated by local setups, which are more traditional,” Ho explained.
The company, so far, has carried out extensive surveys in the countries they are intending to penetrate.
The experience gained in Malaysia would also serve to prepare the company for its eventual excursion into the Middle East. “The populace are more conservative, but generally for treatments, they are less inhibited,” she said, “But some adjustments, such as more private facilities, are necessary.”
However, being a consumer driven setup, its fortunes are invariably tied to economic sentiments, which has taken a battering since the US economy imploded, dragging much of the global economy into recession.
Ho said sales have remained relatively resilient. However, the company will look to customise smaller packages that are more varied and which will cater more to individual needs.
“To control costs, we have also pursued below-the-line marketing strategies, such as tie-ups with credit cards,” Ho elaborated.
For the half-year ended June this year, revenue dipped 4.1% as customers deferred utilising their prepaid packages.
Profit was down by a higher 83% due to higher operating expenses as the company opened new outlets – part of its strategic expansion plans. Financially, the company’s gearing is elevated but interest coverage, at 4.2x, looks adequate.
Ho remains confident of negotiating the downturn, having survived the wax and wane of more than one. But the fact that it has stayed at the forefront of an industry, amid the frivolous shifts of faddish consumer trends, probably deserves more mention.
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