Laundry chain 5àSec launches “popular” brand to protect itself from competition

The French laundry chain 5àSec has Brazil as its main market. The country concentrates around 30% of the company’s stores, which have just surpassed 500 units, most of them franchised.

Even so, the company sees a lot of potential to expand its operations here, especially when focusing on two areas that were still on the sidelines within the operation: low-cost laundries and operation in commercial and residential buildings.

This proposal to diversify the French network can be seen as a reaction to the offensive of the giant Unilever in this market in Brazil. The multinational has been opening laundries in the country with the Omo brand, especially inside condominiums.

Unilever aims to become the largest chain in the sector within five years and accelerated its plans in 2020 with the acquisition of Grupo Acerte, owner of the Quality and Prima Clean laundry brands.

5àSec is reacting to this. To reach an audience that is not willing to spend a lot to have their clothes washed and ironed, the company launched the LavPop by 5àSec banner.

According to Fábio Roth, president of the chain, 5àSec has just signed its first contract with a franchisee in this format, and the forecast is to reach 40 operations of the new banner in December.

Cabinets

There will be two LavPop formats, one with traditional street stores and the other with lockers installed inside the buildings. In this format, the consumer places their clothes in one of the closets, which will be connected through an application. When the service is ready, the consumer receives a notification and can pick it up in a specific locker.

According to Roth, the company wants to reach classes that are not served by the standard 5àSec store, more focused on classes A and B, especially executives. “When we look at the scenario of the sector in Brazil, we have a lot to grow. The penetration in the country is only 4% of the economically active population using laundries, while in Europe it exceeds 25%”, he compares.

Another segment with potential, according to the executive, is residential buildings. With increasingly smaller apartments, but with common areas for laundry, 5àSec wants to become an option for managing spaces, also through franchises.

Negotiations with condominiums are already underway. Both the option of installing the complete laundry room – with employees or in a self-service model – will be offered, as well as just the lockers for clothes, which would be collected and delivered by the nearest store.

adaptations

5àSec hasn’t had much to celebrate in the last two years. With people working more from home because of the pandemic, many have stopped going to outside laundries. This caused the company’s revenue to fall 35% in 2020. In 2021, the company recovered part of its sales by also growing 35%, to R$ 200 million. The recovery, however, was insufficient to return to the pre-pandemic level.

Despite the launch of the new banner, 5àSec will not fail to look to its premium segment. According to the company’s president, even with the home office, there was an adaptation of the laundries. The delivery service, for example, became free of charge and new service models began to be offered, such as the monthly subscription. Today, this business already represents about 13% of the company’s revenue.

For Alberto Serrentino, retail specialist and founder of Varese Retail consultancy, these new recurrence models should be the great growth point for laundries, despite the low penetration in the country. , but it is necessary to adjust the issue of prices depending on the public you want to reach”, says Serrentino.

Wash and Iron

– Impact: 5àSec suffered at the beginning of the pandemic and saw its revenue drop 35% in 2020; even with recovery last year, it is still below the pre-crisis level.

– Reaction: To face this retraction, the network stopped charging for deliveries and started offering a monthly subscription service.

– Diversification: The new bet is on a more popular flag, LavPop, which will also fight competition from Omo. The information is from the newspaper. the state of Sao Paulo.