Wednesday, August 25, 2010

Why The American Spa Giant 'Red Door' Chose India Over China.

MUMBAI: American spa major Red Door Spa Holdings has bypassed China and zeroed in on India for starting its global operations, a senior company official said.

“India was our first choice over China because of many factors,” said Todd Walter, CEO, Red Door Spa Holdings. “The rate at which the hospitality industry, specially the five-star hotels are growing, an increasing demand for tourism, thousands of years of culture of well-being (Ayurveda), right demographics, younger population (highly educated and affluent)—all contributed to our decision.”

For its maiden foray outside the $13.5-billion North American spa market, Red Door is ready with a two-fold strategy. First, it will partner with a leading Indian hospitality chain. Second, it will also tie up with another partner for free-standing spas in all the major Indian cities, which may include high-end residential projects as well.

“In a decade, our goal is to be in every major city of the world. And in India, we should have two spas in Delhi and Mumbai by 2011,” said Mr Walter, who is on an India visit.

The value addition that Red Door brings in for a hospitality chain, feels Mr Walter, is an increasing local footfall because of the day spa concept. And along with its Mario Tricoci salon expertise, Red Door CEO is confident of opening an additional revenue door for the hotel it partners with.

In a bid to protect the brand name and luxury positioning, Red Door won’t go for either a licensing or a franchise model in India. “It has to be a JV or a model where we have a supervisory role for sure,” said Mr Walter. All the 31 spas that operate under the Red Door name and the 20 salons under Mario Tricoci are directly owned by the Red Door Spa Holding group so that they can ensure the luxury positioning of the brand.

A leader in the North American day spa market with a turnover of $160 million, Red Door Spa started working on its global expansion strategy after the onset of recession in America.

With over 100 years in the industry, Red Door Spa owns and operates 51 full-service salons and day spas across the United States. The privately-held company backed by North Castle Partners, a private-equity firm specializing in investments in the healthy living and aging sector, licenses trademarks from the publicly-traded fragrance and cosmetics company, Elizabeth Arden Inc, part of Unilever PLC and a $1.1-bn global brand.

Tags:Red Door, Todd Walter, Red Door Spa Holdings, Mario Tricoci, North Castle Partners, Elizabeth Arden, Day Spa, Indian Hospitality Chain, Salon Franchise, franchise model, licensing,

Source:24 AUG, 2010, 02.05AM IST, NANDINI RAGHAVENDRA,ET BUREAU

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