Over the last year the VLCC Group has consolidated its market presence, strengthened its management team and set in place its business processes. The company’s name has been changed to align strongly with its core activities. The business model has been migrated to owned centers completely. The Board consists of five non-promoter directors, including three non-employee professional directors - a management ‘guru’, one of the country’s best taxation experts and a risk management expert. A governance mechanism with Board committees is already in place. The Statutory and Internal Audits of VLCC are conducted by one of the Big-4 accounting firms.
The first phase of the company’s 5 year expansion plan has been completed, with 19 new outlets being opened, including newly relocated and renovated centers. To meet its commitment to customers and provide high quality services at value-for-money prices, the VLCC group has committed over Rs 300 Million in expansion and up-gradation of infrastructure and equipment at the centre and institutes, as well as in the personal care products business in India.
Additional funds have been committed to the opening of 2-4 international centres in the Middle-East and UK this year, with the first two planned for the third quarter of the current fiscal. This marks the start of the international expansion for the VLCC Group. Two new training institutes have been added, strengthening the education and training business. The group added over 300 people to its headcount in the last 5 months alone.
VLCC Personal Care too strengthened its market presence and reach, opening up new markets and launching new products across the skin care and body care categories, including a foray into health foods with VLCC Slimmer’s Honey. VLCC Personal Care’s revenues grew 116% in FY 2004-05 and despite a large increase in market building and advertising spends, it reported profits for the second year running. Its flagship product, VLCC Shape Up anti-cellulite oil & gel, launched in February 2004, has already become a category leader.
The VLCC Group is benefiting from two key industry trends that the group straddles - retailing is witnessing significant growth, and so is the wellness and healthcare industry The VLCC Group is now set to accelerate the pace of growth.
The goal is to double its top line every 2-3 years, all within the wellness domain. The Group’s financial goals over the next 6-7 years envisage 25% of its expanded business to come from the personal care products business, 20% from international operations, 10% from new businesses, 5% from education & training and the balance from the slimming and beauty services business.
Expansion of overall profit margins is being driven by higher staff productivity, an increase in value added services, changing of the business mix towards high margin businesses and service delivery standardization measures. The group would consider both organic as well as inorganic growth options. The personal care products business is set to grow at a scorching pace - 2-3 times every year for the next 3 years. Non-financial goals include the building of a robust, employee friendly team-oriented organization. VLCC aims to be a leader in HR practices.
By 2010-11 the VLCC Group targets 1 million sq. ft. of retail space and a presence of over 250 services outlets in India and overseas. Personal care products and overseas businesses, as well as new businesses in related areas, are likely to contribute a significant part of the overall business mix. The group is evaluating both organic as well as inorganic growth options. Given the strong cash flows, the investment requirements are not sizeable and would be met from a mix of various sources, internal as well as external. The Group is considering a public listing, at an appropriate time.
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