Home NEWSINDUSTRY NEWS How’s the salon industry gearing up for the monetary downside of COVID-19 crisis?

How’s the salon industry gearing up for the monetary downside of COVID-19 crisis?

by Arun Shirishkar

The 21-day nationwide lockdown has brought the salon industry to a standstill. Kanishka Ramchandani brings a special report

In a heartfelt tweet to the authorities, Vipul Chudasama, Hairdresser and Owner of Vipul Chudasama Hair Studio, wrote, “Dear Prime Minister/ Chief Minister, I am an Indian Hair Artist having a salon and private hairdressing school in Bandra (w) Mumbai. I am worried about my industry and fellow hairdressers. For our customers (fellow Indians) & team members’ well-being we had taken all possible safety measures from February, but we have stopped working from 19th March 2020 to fight with novel COVID-19. With huge overheads I am really concern about my

  • Bank Loans EMI
  • Salon & Private School Rent Cheques
  • Employees’ Salaries
  • House Rent
  • Food Bills and much more..

We have no way to pay all bills. My industry needs attention, We need your support for 3 months at the earliest for our salon industry survival.” A majority of salon owners in India are stressed out because of the uncertainty around the financial repercussions of COVID-19. While they have supported the government’s decision of a complete lockdown, they are worried about their ability to bounce back into action. Many salons ceased operations much prior to the official announcements, amid fears of the pandemic. A nationwide lockdown is as new to us as the novel coronavirus, and it is uncertain how the economy will fare in the aftermath. Salon owners, who are tied down with overheads that include rentals, business loans, staff salaries and maintenance, have mixed feelings about the outcome of the lockdown. The relief provided by the Reserve Bank of India (RBI) and general optimism about the grooming segment is off-set by an unsteady bottom line.

Contributing to the service sector
On an online petition signing portal, www.change.org , Turjo Ganguly, Co- Founder of Bev n Jo’s family salon, Kolkata, has started a petition aimed to garner support from Finance Minister Nirmala Sitharaman. In this petition, it is mentioned: “Today, we request the government to support salons and beauty parlours of India. We urge the finance minister to help the salon industry so it doesn’t fall flat on its face. SMEs constitute the majority of the industry whose size is more than ₹80,000 crore. Only salons constitute more than 31% of the beauty and wellness market. The salon industry generates more than ₹2000 crore revenue each year in India. There are around 60,000 salons and beauty parlours in India, the vast majority of which fall under SMEs. India, like many other countries around the world, is experiencing a national health crisis caused by Coronavirus pandemic. The entire nation is on a 21-day lockdown. It is estimated that 25-30% of salon workers could lose their job if the shutdown continues. For a salon to continue being operational, they have to be financially sustainable to ensure payment of loans, expenses, salaries, rent & so much more. Our community cannot work from home!”

The funny memes on social media notwithstanding, there is no guarantee that customers will flock to salons after the lockdown is lifted. There is an equal amount of doubt about salon staff retaining their jobs. Further if the ban on imports persists, salons might face a dearth of products, too. Salon owners might be required to take some tough decisions in the time to come. The current situation calls for an organised and united front by the fraternity.

Looking beyond
We got in touch with Samir Srivastav, CEO, Jean Claude Biguine Salon and Spa to understand from him how business is likely to get affected in the aftermath of the lockdown. He said, “In the next six months after the lockdown, retail business in salons will undergo a drastic change. At JCB, our new launches, expansion plans, and a new format that we had planned to try will all get delayed at least by six months. Our partners, who are mostly MNCs, will have their own means of tackling the situation, and this will affect us, too.”

“We are expecting economic relief from the government, and we have already spoken to the wellness arm of Federation of Indian Chambers of Commerce & Industry (FICCI). Now the time is not right as the government already has lot of challenges to face but we will put together a representation for the salon industry.”

Decoding RBI’s moratorium on EMI
RBI has instructed lenders (banks and other financial institutions) to provide a moratorium of three months for all term loan installments. Term loans include all kinds of retail loans such as vehicle loan, home loan, personal loan, agricultural term loan and crop loan. Moratorium is applicable on overall EMI, including interest and principal amount.

  • It is not a waiver, it is simply a deferment of payment of EMI.
  • It will have no effect on the terms and conditions of the loan.
  • It is ideal to continue with your EMI schedule if you can manage the liquidity otherwise your interest will continue to accrue over the moratarium period.
  • Availing the moratarium will not affect your credit score.

(information courtesy Livemint.com)

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