Reliance Retail and Naturals Salon & Spa have called off their acquisition talks on differences in valuation of the latter, executives aware of the development said.
Reliance Retail had been in advanced negotiations with Groom India Salons & Spa, which owns Naturals, to acquire 49% stake in the salon chain in a deal that would have marked Reliance’s entry in the fast-growing salon business and given Naturals’ bandwidth and backing of the conglomerate to rapidly scale up amid increased competition in the sector.
“It was mutually agreed to withdraw from the transaction due to potential synergy mismatches and other preferences,” Naturals Salon & Spa chief executive CK Kumaravel confirmed to ET.
With close to 700 outlets across India, Naturals Salon & Spa is among India’s top five national salon chains, besides Hindustan Unilever’s Lakme Lever, stylist Jawed Habib’s salon chain and Studio11. Each of these have announced expansion plans in recent months, including into tier-2 and -3 markets.
“Naturals is presently well poised with plans of expansion into multiple verticals and extended businesses. The salon is going global and the company will plan to tap the capital markets for its growth plans at an appropriate time,” Kumaravel said.
An email seeking comments from Reliance Retail did not elicit a response till press time on Tuesday.
“Reliance Retail remains keen on the salon business which has been growing in high double digits and may look for synergistic or tuck-in acquisitions. This would also be in synergy with its beauty platform Tira,” one the executives mentioned above said.
Established in the early 2000s, Naturals Salon & Spa is aiming for a footprint of 3,000 salons by 2025. Kumaravel had previously confirmed the negotiations with Reliance in a social media post.