Nail salons are next in line for a Starbucks-style expansion after decades of being ignored by investors, the boss of the UK's biggest luxury chain has said, after securing a £130m valuation.
Townhouse, which runs 40 luxury nail salons in the UK, said it was targeting hundreds of new franchise sites after securing backing from the US private equity firm behind the Burger King and Tim Horton chains in China.
The new investment from Cartesian Capital will fuel the expansion of the business, founded in 2018 by Juanita Huber-Millet and run by her husband and CEO Jonathan Millet.
Millet said he was capturing a turning point in the nail care industry, which is highly fragmented and typically underinvested in compared to other services.
“I think there's probably an overlooked element of beauty services in general,” she told the Press Association.
“I would say there is a small element that historically, 20 or 30 years ago, finance and capital was very male-dominated, and this was a sector that primarily served women.
“So if you're a private equity investor 15 or 20 years ago, maybe it wasn't on your mind as something to invest in.”
He drew comparisons to industries such as coffee shops, hotels, gyms and sandwich shops, which have expanded with the rise of chains in recent decades.
Other parts of the salon sector, such as waxing and massage, have begun to grow with brands “offering that Starbucks-style experience” after years of the beauty services industry “falling behind.”
Meanwhile, there are no major nail salon chains in the UK, and Townhouse enters a market typically led by independent stores and boutiques.
Millet also said the nail industry has been plagued by poor working conditions for staff, lack of employment contracts and even cases of modern slavery.
“In our industry there has historically been a lot of exploitation of workers,” he told the Press Association.
“When Covid hit, there were a lot of people in the industry who didn't have contracts, who were just paid in cash, so they didn't get any help from the government.
“And we still see a lot of people, as we hire, who have worked in the industry and didn't have contracts, even, less widespread but there, some elements of trafficking and contract labor.”
Townhouse says it offers its nail technicians above-market salaries, private healthcare, paid leave and structured career progression, including in the US, where it currently has a handful of stores.
The company has signed up major franchisees, with around 149 sites committed over the next five years and another approximately 350 in advanced negotiations.
It said this would take the chain to around 500 salons internationally and create approximately 5,400 jobs.
Millet said Townhouse is in the “premium to luxury end of the market” with prices ranging from £30 to £100 for each treatment.
He suggested nail care was “more resilient” to economic downturns, adding: “We see people who may need to cut back on some aspects of their lives actually sticking with their beauty regime because it's that little moment of luxury.”
“It's not affordable for everyone, but it's a price people are willing to pay.”
The chain is mainly focused on London, but has also opened salons in cities such as Manchester, Bristol and Leeds.
