The owner of Aberdeen-based Dream Beauty Studio says he is “struggling but fighting” to keep his two salons open as the business grapples with rising costs.
Diago Harry and his wife Jass Kaur operate outlets in both The Trinity Centre and Asda at Bridge of Dee.
However, rising rent and cost of products is putting a strain on the business with Mr Harry warning price rises in a range of its beauty services are “inevitable”.
He also revealed that at least 15% of the treatments being provided to customers are running at a loss.
The business has recently been hit with a 3% increase in rent for the Asda unit where Dream Beauty Studio has been operating for the past three years.
Outgoings growing
Mr Diago, who opened its Trinity Centre salon a year ago, pays a flat rate at both locations which covers both his rent and service charge costs such as electricity.
He said: “At the moment we are struggling but fighting.
“As far as electricity charges I’m not sure what will happen as it’s all included.
“My rent has gone up in Asda by 3% and I don’t know when the Trinity Centre is going to come and ask me for more rent.
“The cost of everything is rising.”
Rising prices for customers
Mr Diago, who has 20 members of staff working across the salons, is now in the process of having to increase prices for customers.
He said: “We haven’t increased our prices but we are feeling the pinch already and in the process of making price changes.
“It’s how we can bring a fair price in for customers.
“But the increase of prices is inevitable as the cost of everything is rising.
“Right now we have stripped down the costs of all of our treatments and at least 15% we are doing at a loss.
“Our product costs have gone up. Every single thing.
“We currently charge £36.99 for gel extensions but it costs us at least £37.50.
“They take a couple of hours and we could charge £39.99 which is £2 profit for the business for two hours work.
“Even 50p counts a lot for the business when you make it to the year end accounts.”
Struggle to recruit
Mr Harry, who says he has spent £8,000 on advertising costs for new staff members the past year, has also been left frustrated by what he calls “an unfair amount of competition”.
He said: “Staff come and work for us a while and then they go and work on their own.
“It’s fine if they start on their own because I do like the competition but not when its unfair.
“As a business we’ve got our rent, rates, staff costs all being paid by the business.
“But when you go and work on your own you don’t pay any of these things.
“I don’t know how we are going to combat this issue. It’s been a problem for a long time in the beauty industry.”
“Confident for the business”
Despite all the pressures facing the salon Mr Harry is remaining upbeat for the future.
He said: “I’m confident for the business and very confident with what I’m doing.
“There is potential to have more than two businesses in Aberdeen.”
Trinity Centre operations manager Kenny Bruce said: “Dream Beauty has been a welcome addition to the centre since joining in 2021 on a new lease.
“Diago has designed a modern and vibrant setting for his customers and his skilled team are friendly and perform their services to the highest of standards.
“He has signed a lease and the terms of that are in place for the duration of it.
Future of Aberdeen shopping centres uncertain
The strain for tenants such as Dream Beauty Studio come in a increasingly uncertain time for retail property in the city.
Recently the Press & Journal exclusively revealed the Trinity Centre could soon be put up for sale.
Centre management firm Ellandi only admit there is a “possibility” of a sale soon although currently, it is not listed on the market.
It had been suggested it could be bought by Aberdeen City Council but this has been ruled out.
The Press and Journal also reported last week that the Bon Accord Centre is up for sale after it had been placed into administration due to “unsustainable cash flow problems stemming from the ongoing impact of the Covid pandemic, rising operational costs and intense retail competition”.
Brookfield, one of the world’s biggest real estate companies, is understood to be the preferred bidder for the food and retail hub, which is being sold by Hammerson.
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