The Brazilian fragrance brand wants to grow again in its home country. Founded in 1976, Água de Cheiro had up to 900 stores across the country and was a pioneer in the beauty franchise market. However, facing a series of crises, the company was over R$ 70 million in debt until it was bought out by Holding Narsana in 2016.
Água de Cheiro was then rebranded. Physical stores got a new layout with a more modern and minimalist style, focusing on clients’ experiences. The logo and product packaging were redesigned and the entire brand operation was restructured. In 2019, the brand counted 180 stores in Brazil.
"We had to understand and optimize internal and external processes, improve the relationship with franchisees, structure new departments and strengthen the brand’s features to then begin to think of expanding," explains general director Olindo Caverzan Junior.
Now fully reorganized, the company plans to open 80 new stores in Brazil in 2020 and increase its revenue in existing points of sales, focusing in the Southeast region, especially in the state capitals - São Paulo, Rio de Janeiro and Belo Horizonte - where the brand was born.
"Our main strategies are to invest in advertisement and communication, focusing on multi-franchisees: entrepreneurs interested in opening more than three brand operations", says the executive.
Caverzan Junior says nearly 15% of Água de Cheiro’s current franchisees own more than just one store. "We will work to increase this number, as we understand it is a sustainable and efficient way for the chain to grow", he says.
The company also intends to expand its audience, which currently consists of consumers of low income who are around 45 years old. "Our goal is to continue to take care of and retain our clients, respecting the origin and the history of the brand. At the same time, we are working to reach new audiences, whether they are people of higher income or of different ages", says Caverzan Junior.
One of Água de Cheiro’s initiatives was to include products licensed by famous international brands such as Everlast and Lamborghini in its portfolio. According to the director, own-brand products correspond to 70% of the company’s portfolio, while fashion brands make up the remaining 30%. The brand also opened a department dedicated to young people, launching the line #Self[ie], aimed at Millennials and inspired by the 1980s and 1990s.
Despite the economic challenges Brazil has faced and the world crisis caused by the new coronavirus pandemic, the executive is optimistic. "We are in a very mature and solid moment of our restructuring process. We have created an expansion department, we have established a partnership with communication agencies and we have worked relentlessly to strengthen the relationship with our current franchisees while building solid relationships with new franchisees. Our growth project includes more caution than acceleration," highlights Caverzan Junior.