Chio-Chio express haidresser’s chain to get $1 million from private investors

According to the company’s forecast, the expected revenue by late 2022 will be 167,8 million rubles

As Realnoe Vremya found out, the federal chain of haidresser’s Chio-Chio is going to attract $1 million of investments by selling 10% of shares to private investors. The founders of a franchise-based business model including over 800 establishments promise high-yield dividends in a year after “going IPO.” If the sale is successful, Ilnaz Nabiullin’s company will get the confirmed estimation of some $10 million.

Financing for growth

The chain of hairdressers is ready to sell up to 10% of the company’s shares in exchange for investments to expand the scale across the country. Any individual can buy the shares without restrictions, from a package of 100,000 rubles. The claimed income of Chio-Chio shares is fixed at 121% a year, u to 68% a year in the long term. The sale of shares kicked off in June, while the deals themselves are sealed through Zapusk investment platform licensed by the Central Bank.

“Chio-Chio has always developed with its own money and without asset attraction,” reads the company’s presentation. “But now the management company is ready to attract external financing for a better and noticeable growth.”

By the company’s forecast, its expected revenue by late 2022 will be 167,8 million rubles.

“The business model of Chio-Chio doesn’t depend on the season or crisis,” says the chain’s founder Ilnaz Nabiullin. “The reason is simple: human hair grows regardless of the economic situation, while during a crisis people, on the contrary, start to save money and choose discounters more often.

In general he says that half a million people get their hair cut in the chain every month.

The chain with 807 salons

Chio-Chio chain is based on franchise. Nowadays it consists of 807 salons, while the franchise itself has earned 3,7 billion rubles. 10-20 salons open every month. Over 5 years of operation in the market, the chain has serviced 2,7 million of regular clients.

Nowadays the chain has more than 700 rent agreements, moreover, lessors themselves offer vacant locations.

“16 haircuts a day is the breakeven point,” explains Chio-Chio’s Marketing Director Grigory Bolotov. “But there is a record — 167 haircuts a day.”

People’s money for growth

“Chio-Chio has just 0,9% of the market share. Now the market seizure is in active phase, and the fastest and determined will be at an advantage. Our goal is 3% of the market in Russia, it is 2,100 salons in Russia and more than 10,000 salons around the world,” Nabiullin explained to Realnoe Vremya.

Four rounds of investment attraction are planned in total: 50 million rubles in June, 70 million rubles in November, 100 million rubles in November 2023, 125 million rubles in November 2024.”

“Early investors are made a discount of the company’s value to attract investments because at the first stage the company is assessed at 500 million rubles,” says the chain’s founder Ilnaz Nabiullin. “We plan to reach 700 million rubles (about $10 million) in the next round by the end of the year. As a result, investments will grow by 40% in four months, which +120% a year of capital.”

“Fast food in the market of hairdresser services”

The history of Chio-Chio hairdressers that went beyond not only Tatarstan but also Russia started in Kazan, as it was noted. There were two salons in the city by September.

Co-owner and creator of Gentlz, Zifa franchise chains Ilnaz Nabiullin who launched Chio-Chio in Kazan told Realnoe Vremya in 2017 about plans for hetting 30% of the economy segment of the market of hairdresser services. He called the chain “fast food in the market of hairdresser services.”

“We cut hair quickly, in 15 minutes, therefore our concept doesn’t envisage queues. But we have such a big flow of clients so that we don’t have the time to process them. We have a master who cut 35 clients’ hair a day,” said Ilnaz Nabiullin.

Now 643 Chio-Chio salons operate in Russia and CIS countries. Another 164 hairdressers are about to open.

Luiza Ignatyeva