Beauty Depot, a Guatemalan family-owned business, has made a name for itself as the largest chain of beauty salons in the country. Founded in December 1999, Beauty Depot has grown from a single store to an expansive network of 29 outlets located in major shopping centers throughout Guatemala. The company employs over 150 Guatemalan families and offers an extensive range of professional beauty products and services, catering to the diverse needs of its customers.
The company’s roots trace back to its founders’ experience in beauty product distribution. They envisioned a salon offering an extensive product range, leading to the creation of Beauty Depot. This innovative model combined salon services with retail beauty products, establishing the company as a leader in Guatemala’s beauty sector.
Navigating the Complexities of Rapid Expansion
With growth came complexity, and as Beauty Depot expanded, managing the profitability and performance of its growing product range became complex. With multiple stores and brands, there was a need for clearer visibility into profitability by category, product, and store to allocate resources effectively and identify future successes.
General Manager Stefanie Lemcke and her team in marketing, IT, reporting, purchasing, and accounting aimed to streamline operations and focus on profitability to maintain their competitive edge.
Transforming Operations Through the Bpeace Pradera Impulsa Program
In 2023, Beauty Depot joined the Pradera Impulsa program, sponsored by CMI in Guatemala, to address expansion challenges and scale effectively. Partnered with marketing and sales expert Yvette Franco, Beauty Depot developed a new sales strategy and product profitability scoring system.
Yvette collaborated closely with the Beauty Depot team to develop a comprehensive sales strategy and a scoring system to define product profitability. Together, they focused on reducing the number of SKUs (Stock Keeping Units), understanding the profitability contribution of each item sold, and refining the product mix to ensure that the company’s efforts were concentrated on the most profitable lines.
The initiative also included the development of a recognition plan for the sales team, aligned with key performance indicators (KPIs). The objective was clear: to streamline the product offerings, focus marketing and promotional efforts on the most profitable products, and ensure that the Beauty Depot brand remained on-trend while optimizing profitability. This approach also involved training employees to prioritize and promote the most profitable products, including Beauty Depot’s private labels.
Driving Profitability: The Impact of Focused Strategic Interventions
The strategic interventions led to remarkable outcomes for Beauty Depot. Revenue increased by 16%, and profits doubled. The company also expanded its workforce, adding seven new full-time jobs, bringing the total to 126 employees—110 of whom are women.
The impact of the program was not just financial but also organizational. As General Manager Stefanie Lemcke noted, “Yvette guided us in getting organized and transformed our approach to our work. She clarified the crucial decision-making process for introducing or removing products from our inventory. Although it was a significant amount of work, it was immensely satisfying.”
For Yvette Franco, the experience was equally rewarding. “I supported Beauty Depot to enhance its profitability, and it brought me immense personal satisfaction. Seeing the tangible impact of our collaborative efforts was incredibly rewarding, knowing it will shape their future operations,” she said. Yvette’s contribution exemplifies the power of expert guidance in helping small businesses navigate challenges and achieve sustainable growth.
The Road Ahead: Sustaining Success in Guatemala’s Beauty Industry
By embracing the challenges that come with expansion, Beauty Depot’s journey illustrates the resilience of small businesses in overcoming expansion challenges. With the Bpeace Pradera Impulsa program’s support, the company refined its operations and is well-positioned for continued success in Guatemala’s competitive beauty industry.
